ad13da-natlmed_newmtn.htm

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S95UCXWmQ3XsybGhwwoE3UVFqnRbvg2nU1htHaAnlDU7RTVdYYLxqtOi5N8yK/eJ 2yNi3z9n8bvGNRLFS0DZ7A== 0000895345-08-000161.txt : 20080227 0000895345-08-000161.hdr.sgml : 20080227 20080227170524 ACCESSION NUMBER: 0000895345-08-000161 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20080227 DATE AS OF CHANGE: 20080227 GROUP MEMBERS: NEW MOUNTAIN AFFILIATED INVESTORS, L.P. GROUP MEMBERS: NEW MOUNTAIN GP, LLC GROUP MEMBERS: NEW MOUNTAIN INVESTMENTS, L.P. GROUP MEMBERS: STEVEN B. KLINSKY SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL MEDICAL HEALTH CARD SYSTEMS INC CENTRAL INDEX KEY: 0000813562 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 112581812 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-58937 FILM NUMBER: 08647289 BUSINESS ADDRESS: STREET 1: 26 HARBOR PARK DR CITY: PORT WASHINGTON STATE: NY ZIP: 11050 BUSINESS PHONE: 5166260007 MAIL ADDRESS: STREET 1: 26 HARBOR PARK DRIVE CITY: PORT WASHINGTON STATE: NY ZIP: 11050 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NEW MOUNTAIN PARTNERS LP CENTRAL INDEX KEY: 0001105474 IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O STEVEN B KLINKSY STREET 2: 787 SEVENTH AVENUE 49TH FL CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2127200300 MAIL ADDRESS: STREET 1: 787 SEVENTH AVENUE STREET 2: 49TH FL CITY: NEW YORK STATE: NY ZIP: 10019 SC 13D/A 1 ad13da-natlmed_newmtn.htm SCHEDULE 13D/A ad13da-natlmed_newmtn.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A (Amendment No. 3)

Under the Securities Exchange Act of 1934

National Medical Health Card Systems, Inc.

(Name of Issuer)

Common Stock, par value $0.001 per share

(Title of Class of Securities)

636918302

(CUSIP Number)

Steven B. Klinsky

New Mountain Partners, L.P.

787 Seventh Avenue

New York, NY 10019

(212) 720-0300

Copies to:

Aviva F. Diamant

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, NY 10004-1980

(212) 859-8000

(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)

February 25, 2008

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box: [ ]

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

CUSIP No. 636918302

Page 2 of 14 Pages

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON New Mountain GP, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF, OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6	CITIZENSHIP OR PLACE ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 6,956,522*
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 6,956,522*
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,956,522*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 54.3%**
14	TYPE OF REPORTING PERSON 00

Represents shares of common stock, par value $0.001 per share (“Common Stock”) of National Medical Health Card Systems, Inc. (the “Issuer”) that are issuable upon conversion of the Issuer’s series A 7% convertible preferred stock, par value $0.10 per share (“Series A Preferred Stock”) held by New Mountain Partners, L.P. and New Mountain Affiliated Investors, L.P. Pursuant to the terms and conditions of the certificate of designations governing the Series A Preferred Stock represented by the amount in Row (8), each share of Series A Preferred Stock entitles its holder to 83.64% of a vote prior to its conversion into shares of Common Stock. Accordingly, as of February 25, 2008, the Reporting Person would be entitled to cast 5,818,435 votes, or 49.8% of the total votes that may be cast by the Issuer’s stockholders, prior to the conversion of the Reporting Person’s shares of Series A Preferred Stock into shares of Common Stock.

Based on calculations made in accordance with Rule 13d-3(d) of the Securities and Exchange Act of 1934, as amended.

SCHEDULE 13D

CUSIP No. 636918302

Page 3 of 14 Pages

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON New Mountain Investments, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF, OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6	CITIZENSHIP OR PLACE ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 6,790,797*
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 6,790,797*
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,790,797*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 53.7%**
14	TYPE OF REPORTING PERSON PN

Represents shares of common stock, par value $0.001 per share (“Common Stock”) of National Medical Health Card Systems, Inc. (the “Issuer”) that are issuable upon conversion of the Issuer’s series A 7% convertible preferred stock, par value $0.10 per share (“Series A Preferred Stock”) held by New Mountain Partners, L.P. Pursuant to the terms and conditions of the certificate of designations governing the Series A Preferred Stock represented by the amount in Row (8), each share of Series A Preferred Stock entitles its holder to 83.64% of a vote prior to its conversion into shares of Common Stock. Accordingly, as of February 25, 2008, the Reporting Person would be entitled to cast 5,679,823 votes, or 48.6% of the total votes that may be cast by the Issuer’s stockholders, prior to the conversion of the Reporting Person’s shares of Series A Preferred Stock into shares of Common Stock.

Based on calculations made in accordance with Rule 13d-3(d) of the Securities and Exchange Act of 1934, as amended.

SCHEDULE 13D

CUSIP No. 636918302

Page 4 of 14 Pages

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON New Mountain Partners, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF, OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6	CITIZENSHIP OR PLACE ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 6,790,797*
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 6,790,797*
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,790,797*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 53.7%**
14	TYPE OF REPORTING PERSON PN

Represents shares of common stock, par value $0.001 per share (“Common Stock”) of National Medical Health Card Systems, Inc. (the “Issuer”) that are issuable upon conversion of the Issuer’s series A 7% convertible preferred stock, par value $0.10 per share (“Series A Preferred Stock”) held by the Reporting Person. Pursuant to the terms and conditions of the certificate of designations governing the Series A Preferred Stock represented by the amount in Row (8), each share of Series A Preferred Stock entitles its holder to 83.64% of a vote prior to its conversion into shares of Common Stock. Accordingly, as of February 25, 2008, the Reporting Person would be entitled to cast 5,679,823 votes, or 48.6% of the total votes that may be cast by the Issuer’s stockholders, prior to the conversion of the Reporting Person’s shares of Series A Preferred Stock into shares of Common Stock.

Based on calculations made in accordance with Rule 13d-3(d) of the Securities and Exchange Act of 1934, as amended.

SCHEDULE 13D

CUSIP No. 636918302

Page 5 of 14 Pages

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON New Mountain Affiliated Investors, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF, OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6	CITIZENSHIP OR PLACE ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 165,725*
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 165,725*
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 165,725*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.7%**
14	TYPE OF REPORTING PERSON PN

Represents shares of common stock, par value $0.001 per share (“Common Stock”) of National Medical Health Card Systems, Inc. (the “Issuer”) that are issuable upon conversion of the Issuer’s series A 7% convertible preferred stock, par value $0.10 per share (“Series A Preferred Stock”) held by the Reporting Person. Pursuant to the terms and conditions of the certificate of designations governing the Series A Preferred Stock represented by the amount in Row (8), each share of Series A Preferred Stock entitles its holder to 83.64% of a vote prior to its conversion into shares of Common Stock. Accordingly, as of February 25, 2008, the Reporting Person would be entitled to cast 138,612 votes, or 1.2% of the total votes that may be cast by the Issuer’s stockholders, prior to the conversion of the Reporting Person’s shares of Series A Preferred Stock into shares of Common Stock.

Based on calculations made in accordance with Rule 13d-3(d) of the Securities and Exchange Act of 1934, as amended.

SCHEDULE 13D

CUSIP No. 636918302

Page 6 of 14 Pages

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Steven B. Klinsky
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ]
3	SEC USE ONLY
4	SOURCE OF FUNDS AF, PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6	CITIZENSHIP OR PLACE ORGANIZATION United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 6,956,522*
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 6,956,522*
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,956,522*
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 54.3%**
14	TYPE OF REPORTING PERSON IN

Represents shares of common stock, par value $0.001 per share (“Common Stock”) of National Medical Health Card Systems, Inc. (the “Issuer”) that are issuable upon conversion of the Issuer’s series A 7% convertible preferred stock, par value $0.10 per share (“Series Preferred Stock”) held by New Mountain Partners, L.P. and New Mountain Affiliated Investors, L.P. Pursuant to the terms and conditions of the certificate of designations governing the Series A Preferred Stock represented by the amount in Row (8), each share of Series A Preferred Stock entitles its holder to 83.64% of a vote prior to its conversion into shares of Common Stock. Accordingly, as of February 25, 2008, the Reporting Person would be entitled to cast 5,818,435 votes, or 49.8% of the total votes that may be cast by the Issuer’s stockholders, prior to the conversion of the Reporting Person’s shares of Series A Preferred Stock into shares of Common Stock.

Based on calculations made in accordance with Rule 13d-3(d) of the Securities and Exchange Act of 1934, as amended.

This Amendment No. 3 amends and supplements the Statement on Schedule 13D originally filed by the Reporting Persons on March 19, 2004, as amended on October 28, 2005 and February 23, 2007 (as amended, the “Statement”). Unless otherwise indicated, all capitalized terms used herein shall have the respective meanings given to them in the Statement.

ITEM 4.

PURPOSE OF THE TRANSACTION

Item 4 is hereby amended by supplementing such section with the following:

Agreement for the Acquisition of the Issuer by SXC Health Solutions Corp.

On February 25, 2008, the Issuer entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SXC Health Solutions Corp., a corporation organized under the laws of Yukon Territory, Canada (“SXC”), SXC Health Solutions, Inc., a Texas corporation and wholly-owned subsidiary of SXC (“US Corp.”), and Comet Merger Corporation, a Delaware corporation that is a newly-formed, wholly-owned subsidiary of US Corp. and an indirect subsidiary of SXC (“Merger Sub”). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, Merger Sub will commence an exchange offer (the “Offer”) to acquire all of the outstanding shares of Common Stock, in which Offer each share of Common Stock validly tendered and not properly withdrawn will be exchanged for (a) $7.70 in cash, without interest, and (b) 0.217 of a validly issued, fully paid and non assessable share of common stock of SXC (“SXC Common Stock”) (such amount of cash and SXC Common Stock, the “Offer Price”). As soon as practicable following the consummation of the Offer, Merger Sub will merge with and into the Issuer, and the Issuer will become an indirect, wholly-owned subsidiary of SXC (the “Second Step Merger”). In the Second Step Merger, stockholders of the Issuer whose shares were not purchased in the Offer (other than stockholders who validly exercised their appraisal rights under the Delaware General Corporation Law) will become entitled to receive the Offer Price for each of their shares of Common Stock.

If more than 9,600,000 shares of Common Stock (including shares of Common Stock issuable upon conversion of outstanding shares of the Series A Preferred Stock) (the Common Stock, together with the Series A Preferred Stock, the “Issuer Stock”), but fewer than 90% of the outstanding shares of Common Stock, are validly tendered and not withdrawn pursuant to the Offer, and assuming all of the other conditions of the Offer have been satisfied or waived, Merger Sub must accept for exchange the tendered shares and may elect to provide a subsequent offering period to achieve ownership of 90% of the outstanding shares, in order to effect the Second Step Merger as a short-form merger pursuant to Section 253 of the Delaware General Corporation Law. In addition, subject to certain conditions and limitations, the Issuer has granted Merger Sub an option to purchase that number of shares of Common Stock as would enable Merger Sub upon exercise of such option (after taking into account all of the shares purchased in the Offer) to achieve ownership of 90% of the outstanding shares of Common Stock. Merger Sub is required to exercise the option if doing so would enable it to effect a short-form merger. If, at the end of the initial offering period (or such later date as the parties may agree), either less than 9,600,000 shares of Common Stock are validly tendered and not withdrawn, or Merger Sub would not be able to effect a short-form merger pursuant to Section 253 of the Delaware General Corporation Law without the acquisition of additional shares of Common Stock (other than through the exercise of the option) or any reduction in the number of shares of Common Stock outstanding, then Merger Sub will terminate the Offer and the parties will instead, in accordance with the terms of the Merger Agreement, seek to consummate the acquisition of the Issuer by SXC by means of a one-step merger of Merger Sub with and into the Issuer following the adoption of the Merger Agreement by the Issuer’s stockholders at a special stockholders meeting (the “One Step Merger”), in which case the merger consideration would be the same as the Offer Price. The One Step Merger and the Second Step Merger are each sometimes referred to herein as the “Merger”. Consummation of the Offer and the Merger are subject to the conditions set forth in the Merger Agreement.

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement, a copy of which is filed as an exhibit to the Form 8-K filed by the Issuer with the Securities and Exchange Commission on February 27, 2008, and is incorporated herein by reference.

Stockholder Agreements

As an inducement to enter into the Merger Agreement, and in consideration thereof, each of the Purchasers entered into a Stockholder Agreement, dated as of February 25, 2008, with SXC and the Issuer (the “Stockholder Agreements”). Pursuant to the Stockholder Agreements, the Purchasers have agreed to tender in the Offer all shares of Common Stock issuable upon the conversion of their shares of Series A Preferred Stock. The Purchasers also have agreed, if a stockholder vote is required by applicable law, to vote all of their shares of Issuer Stock in favor of the Merger and against any acquisition proposal or any action that would be adverse to the Offer or the Merger. In the event that the Merger Agreement is terminated by the Issuer in order to accept a “superior proposal”, the Purchasers’ tender and voting obligations will terminate. In the event that the Board makes a “change in recommendation” with respect to the Merger Agreement or the transactions contemplated thereby, other than in connection with a superior proposal, the Purchasers will be obligated to tender in the Offer only shares representing 30% of the outstanding shares of Issuer Stock at that time and to vote in favor of the Merger only shares representing 30% of the total vote of the shares of Issuer Stock entitled to vote on such matter.

Pursuant to the Stockholder Agreements, the Purchasers also agreed that, except as specified by the Stockholder Agreements, for a period of one year following SXC’s first acceptance for payment of shares tendered in the Offer (if the transaction is effected by means of the Offer followed by the Second Step Merger) or the effective time of the Merger (if the transaction is effected as a One Step Merger), they will not sell or otherwise transfer any shares of SXC Common Stock acquired pursuant to the Merger Agreement, except to participate in a transaction that has been approved by the board of directors of SXC.

The Purchasers have further agreed, except in the circumstances specified in the Stockholder Agreements, that they will not solicit third-party proposals, provide information or engage in discussions with third parties relating to alternative business combination transactions. In the event the Merger Agreement is terminated under circumstances in which a termination fee is payable by the Issuer to SXC, the Purchasers have agreed to pay SXC 50% of the Purchasers’ profit (determined in accordance with the valuation provisions set forth in the Stockholder Agreements) in excess of $11.50 per share from the sale of their shares of Common Stock pursuant to another acquisition proposal that is consummated within 12 months of the termination of the Stockholder Agreements.

The Stockholder Agreements will terminate upon the termination of the Merger Agreement. Additionally, the Purchasers may terminate the Stockholder Agreements in the event that the amount of the Offer Price or the merger consideration is reduced, or the form of the Offer Price or the merger consideration is changed, or the proportion of cash to SXC Common Stock is reduced, in each case, without the Purchasers’ consent.

The foregoing description of the Stockholder Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of such agreements, copies of which are attached hereto as Exhibits 99.7 and 99.9, respectively, and are incorporated herein by reference.

Proxies

In connection with the Stockholder Agreements, each of the Purchasers have executed a Proxy, dated as of February 25, 2008, relating to the voting of their shares of Issuer Stock (the “Proxies”).

The foregoing description of the Proxies is not complete and is qualified in its entirety by reference to the full text of the Proxies, copies of which are attached hereto as Exhibits 99.8 and 99.10, respectively, and are incorporated herein by reference.

SXC Registration Rights Agreement

In connection with the Stockholder Agreements, the Purchasers also have entered into a Registration Rights Agreement, dated as of February 25, 2008, with SXC (the “SXC Registration Rights Agreement”). The SXC Registration Rights Agreement grants the Purchasers one demand registration right with respect to the SXC Common Stock issued to them in connection with the Offer or the One Step Merger, exercisable during the period specified in the SXC Registration Rights Agreement if the trading volume of SXC Common Stock is below 100,000 shares in the aggregate on certain specified exchanges during agreed-upon measurement periods. The Purchasers were also granted “piggyback” registration rights with respect to their SXC Common Stock, exercisable during the period specified in the SXC Registration Rights Agreement, subject to the terms and conditions set forth therein.

The foregoing description of the SXC Registration Rights Agreement is not complete and is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Exhibit 99.11 and is incorporated herein by reference.

Amendment of Certificate of Designations; Dividends

In connection with the execution of the Merger Agreement, the Issuer amended its Certificate of Designations, Preferences and Rights of Series A 7% Convertible Preferred Stock (the “Amendment”). The Amendment excludes the transactions contemplated by the Merger Agreement and the Stockholder Agreements from the definitions of “change in control” and “liquidation” and provides that shares of Series A Preferred Stock, upon their conversion into shares of Common Stock, will have the right only to receive the Offer Price per share (if the transaction is effected by means of the Offer followed by the Second Step Merger) or, if the transaction is effected as a One Step Merger, to receive only the merger consideration per share. The Amendment also provides that, unless and until the Merger Agreement is terminated, shares of Series A Preferred Stock will convert into shares of Common Stock on a one-to-one basis. Under the Merger Agreement, the Issuer is permitted to pay the Purchasers all accrued and unpaid dividends on the Series A Preferred Stock. The Board has declared a dividend on the Series A Preferred Stock, payable in cash immediately prior to the earlier of SXC’s first acceptance of shares of Common Stock tendered in the Offer or the effective time of the Merger, in an amount equal to all accrued and unpaid dividends to the date of payment.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached hereto as Exhibit 99.12 and is incorporated herein by reference.

ITEM 5.

INTEREST IN SECURITIES OF THE ISSUER

Item 5 is hereby amended and restated to read as follows:

(a). Based on the Merger Agreement filed as an exhibit to the Form 8-K filed by the Issuer with the Securities and Exchange Commission on February 27, 2008, as of February 25, 2008, there were 5,863,713 shares of Common Stock issued and outstanding.

As of February 6, 2008, Mr. Klinsky and NM may be deemed to beneficially own an aggregate of 6,956,522 shares of Common Stock consisting of the 6,956,522 shares of Common Stock that may be deemed to be beneficially owned by the Purchasers, as described below, representing, in the aggregate, approximately 54.3% of the issued and outstanding shares of Common Stock, based on calculations made in accordance with Rule 13d-3(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).

Mr. Klinsky and NM disclaim beneficial ownership of the shares of Common Stock beneficially owned by the Purchasers and NMI to the extent that partnership interests in the Purchasers and NMI are held by persons other than Mr. Klinsky or NMI.

As of February 25, 2008, NMI may be deemed to beneficially own an aggregate of 6,790,797 shares of Common Stock that may be deemed to be beneficially owned by New Mountain, representing approximately 53.7% of the issued and outstanding shares of Common Stock, based on calculations made in accordance with Rule 13d-3(d) of the Exchange Act. NMI disclaims beneficial ownership of the shares of Common Stock beneficially owned by the New Mountain to the extent that partnership interests in New Mountain are held by persons other than New Mountain.

As of February 25, 2008, New Mountain may be deemed to beneficially own an aggregate of 6,790,797 shares of Common Stock, representing approximately 53.7% of the issued and outstanding shares of Common Stock, based on calculations made in accordance with Rule 13d-3(d) of the Exchange Act

As of February 6, 2008, NMAI may be deemed to beneficially own an aggregate of 165,725 shares of Common Stock, representing approximately 2.7% of the issued and outstanding shares of Common Stock, based on calculations made in accordance with Rule 13d-3(d) of the Exchange Act.

(b). Subject to the Stockholder Agreements and the Proxies, each Reporting Person may be deemed to share the power to vote or direct the vote and to dispose or to direct the disposition of the shares of Common Stock that the Reporting Person may be deemed to beneficially own as described above.

(c). There have been no purchases or sales by any of the Reporting Persons of Common Stock during the last 60 days.

(d). No person is known by any Reporting Person to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any shares of Common Stock that may be deemed to be beneficially owned by any Reporting Person, except as set forth in the Stockholder Agreements.

(e). Not applicable.

ITEM 6.

CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER

Item 6 is hereby amended by adding the following paragraph to the end thereof:

The information set forth in Item 4 with respect to the Merger Agreement, the Stockholder Agreements, the Proxies, the SXC Registration Rights Agreement and the Amendment is hereby incorporated by reference herein.

ITEM 7.

MATERIAL TO BE FILED AS EXHIBITS

99.1	Joint Filing Agreement, dated March 19, 2004.*

99.2	Amended and Restated Preferred Stock Purchase Agreement, dated as of November 26, 2003, by and between National Medical Health Card Systems, Inc. and New Mountain Partners, L.P.*

99.3	Certificate of Designations, Preferences and Rights of Series A 7% Convertible Preferred Stock of National Medical Health Systems, Inc., dated March 18, 2004.*

99.4

Support Agreement, dated as of October 30, 2003, by and among National Medical Health Card Systems, Inc., Bert E. Brodsky, P.W. Capital Corp., Lee Jared Brodsky, David Craig Brodsky, Jeffrey Holden Brodsky, Jessica Brodsky Miller, the Bert E. Brodsky Revocable Trust, the Irrevocable Trust of Lee Jared Brodsky, the Irrevocable Trust of David Craig Brodsky, the Irrevocable Trust of Jeffrey Holden Brodsky and the Irrevocable Trust of Jessica Brodsky Miller and New Mountain Partners, L.P.*

99.5	Registration Rights Agreement, dated as of March 19, 2004, by and among National Medical Health Card Systems, Inc., New Mountain Partners, L.P., and New Mountain Affiliated Investors, L.P.*

99.6	Management Rights Letter, dated March 19, 2004, between National Medical Health Card Systems, Inc. and New Mountain Partners, L.P.*

99.7	Stockholder Agreement, dated as of February 25, 2008, by and among SXC Health Solutions Corp., New Mountain Partners, L.P. and National Medical Health Card Systems, Inc.

99.8	Proxy, dated as of February 25, 2008, by New Mountain Partners, L.P.

99.9	Stockholder Agreement, dated as of February 25, 2008, by and among SXC Health Solutions Corp., New Mountain Affiliated Investors, L.P. and National Medical Health Card Systems, Inc.

99.10

Proxy, dated as of February 25, 2008, by New Mountain Affiliated Investors, L.P.

99.11

Registration Rights Agreement, dated as of February 25, 2008, by and among SXC Health Solutions Corp., New Mountain Partners, L.P. and New Mountain Affiliated Investors, L.P.

99.12

Certificate of Amendment of Certificate of Designations, Preferences and Rights of Series A 7% Convertible Preferred Stock of National Medical Health Card Systems, Inc., dated February 25, 2008.

*Filed with the Schedule 13D filed by the Reporting Persons on March 19, 2004.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: February 27, 2008

	NEW MOUNTAIN GP, LLC
	By:	/s/ Steven B. Klinsky
		Steven B. Klinsky
		Member
	NEW MOUNTAIN INVESTMENTS, L.P. By: New Mountain GP, LLC, its general partner
	By:	/s/ Steven B. Klinsky
		Steven B. Klinsky
		Member
	NEW MOUNTAIN PARTNERS, L.P. By: New Mountain Investments, L.P., its general partner By: New Mountain GP, LLC its general partner
	By:	/s/ Steven B. Klinsky
		Steven B. Klinsky
		Member

	NEW MOUNTAIN AFFILIATED INVESTORS, L.P. By: New Mountain GP, LLC, its general partner
	By:	/s/ Steven B. Klinsky
		Steven B. Klinsky
		Member

	By:	/s/ Steven B. Klinsky
		Steven B. Klinsky

EX-99.7 2 ad99_7.htm STOCKHOLDER AGREEMENT ad99_7.htm

Exhibit 99.7

STOCKHOLDER AGREEMENT

BY AND AMONG

SXC HEALTH SOLUTIONS CORP.,

NEW MOUNTAIN PARTNERS, L.P.,

AND

NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.

DATED AS OF FEBRUARY 25, 2008

INDEX OF DEFINED TERMS


	Page
Agreement		1
Beneficial Ownership		2
Beneficially Own		2
Beneficially Owned		2
Claims		11
Company		1
Company Common Stock		1
Company Convertible Preferred Stock		1
Company Stock		1
Covered Shares		2
Depositary		3
Encumbrance		2
Existing Shares		2
Fundamental Amendment		13
Grantees		5
Lock-Up Period		8
Meeting Right		12
Merger		1
Merger Agreement		1
Merger Sub		1
Offer		1
Operative Date		2
Other Stockholder		2
Parent		1
Prohibited Activity		11
Registration Rights Agreement		8
Releasees		11
Section 3.1(a) Matters		5
Stockholder		1
Tender Documents		3
Traded Securities		11
Transfer		2
US Corp.		1
Valuation Period		11

STOCKHOLDER AGREEMENT

STOCKHOLDER AGREEMENT, dated as of February 25, 2008 (this “Agreement”), by and among SXC Health Solutions Corp., a corporation organized under the laws of Yukon Territory, Canada (“Parent”), New Mountain Partners, L.P., a Delaware limited partnership (the “Stockholder”), and National Medical Health Card Systems, Inc., a Delaware corporation (the “Company”).

W I T N E S S E T H:

WHEREAS, concurrently with the execution of this Agreement, Parent, SXC Health Solutions, Inc., a Texas corporation (“US Corp.”), Comet Merger Corporation, a newly-formed Delaware corporation that is wholly-owned by US Corp. and an indirect wholly-owned subsidiary of Parent (“Merger Sub”), and the Company are entering into an Agreement and Plan of Merger, dated as of the date hereof (as amended, supplemented, restated or otherwise modified from time to time, the “Merger Agreement”) pursuant to which, among other things, Merger Sub will commence an exchange offer (the “Offer”) to acquire all of the outstanding shares of common stock, par value $0.001 per share, of the Company (“Company Common Stock”), and following the consummation of the Offer (or, subject to certain conditions, in lieu thereof), Merger Sub will merge with and into the Company (the “Merger”) and each outstanding share of Company Common Stock and each outstanding share, if any, of the Company’s Series A 7% Convertible Preferred Stock, par value $0.10 per share (“Company Convertible Preferred Stock”, and together with the Company Common Stock, “Company Stock”), will be converted into the right to receive the merger consideration specified therein.

WHEREAS, as of the date hereof, the Stockholder is the record and beneficial owner, in the aggregate, of 6,790,797 outstanding shares of the Company Convertible Preferred Stock;

WHEREAS, as a material inducement to Parent entering into the Merger Agreement, Parent has required that the Stockholder agree, and the Stockholder has agreed, to enter into this agreement and abide by the covenants and obligations with respect to the Covered Shares (as hereinafter defined) set forth herein.

NOW THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I

GENERAL

1.1. Defined Terms . The following capitalized terms, as used in this Agreement, shall have the meanings set forth below. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Merger Agreement.

“Beneficial Ownership” by a Person of any securities includes ownership by any Person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares (i) voting power which includes the power to vote, or to direct the voting of, such security; and/or (ii) investment power which includes the power to dispose, or to direct the disposition, of such security; and shall otherwise be interpreted in accordance with the term “beneficial ownership” as defined in Rule 13d-3 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended; provided that for purposes of determining Beneficial Ownership, a Person shall be deemed to be the Beneficial Owner of any securities which such Person has, at any time during the term of this Agreement, the right to acquire pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise (irrespective of whether the right to acquire such securities is exercisable immediately or only after the passage of time, including the passage of time in excess of 60 days, the satisfaction of any conditions, the occurrence of any event or any combination of the foregoing). The terms “Beneficially Own” and “Beneficially Owned” shall have a correlative meaning.

“Covered Shares” means, with respect to the Stockholder, the Stockholder’s Existing Shares, together with any shares of Company Stock or other voting capital stock of the Company and any securities convertible into or exercisable or exchangeable for shares of Company Stock or other voting capital stock of the Company, in each case, that the Stockholder acquires Beneficial Ownership of on or after the date hereof.

“Encumbrance” means any security interest, pledge, mortgage, lien (statutory or other), charge, option to purchase, lease or other right to acquire any interest or any claim, restriction, covenant, title defect, hypothecation, assignment, deposit arrangement or other encumbrance of any kind or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement), excluding restrictions under securities laws and excluding any Encumbrance set forth in the Certificate of Designations.

“Existing Shares” means, with respect to the Stockholder, the number of shares of Company Stock Beneficially Owned and owned of record by the Stockholder, as set forth in the recitals.

“Operative Date” means the Acceptance Date, if the transactions contemplated by the Merger Agreement are effected by means of the Offer followed by the Second Step Merger, and means the Closing, if the transactions contemplated by the Merger Agreement are effected as a One Step Merger.

“Other Stockholder” means New Mountain Affiliated Investors, L.P., a Delaware limited partnership and the holder of the outstanding shares of Company Convertible Preferred Stock not held by the Stockholder.

“Transfer” means, directly or indirectly, to sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of (by merger (including by conversion into securities or other consideration), by tendering into any tender or exchange offer, by operation of law or otherwise), either voluntarily or involuntarily, or to enter into any contract, option or other

arrangement or understanding with respect to the voting of or sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of (by merger, by tendering into any tender or exchange offer, by operation of law or otherwise) (but does not include any conversion of the Company Convertible Preferred Stock into Company Common Stock after the Certificate of Amendment has become effective).

ARTICLE II

TENDERING

2.1. Agreement to Tender.

(a) The Stockholder hereby agrees that, within five business days after commencement of the Offer, the Stockholder shall validly tender or cause to be tendered in the Offer all of the shares of Company Stock represented by the Stockholder’s Covered Shares pursuant to and in accordance with the terms of the Offer, by delivering to the depositary designated in the Offer (the “Depositary”) (i) an executed letter of transmittal with respect to the Covered Shares, (ii) a certificate or certificates representing the Covered Shares, (iii) all other documents or instruments required to be delivered pursuant to the terms of the Offer, and (iv) a letter of instruction signed by the Stockholder instructing the Company to convert the Covered Shares into Company Common Stock effective upon receipt of a certificate from an executive officer of Parent stating that (1) all of the conditions to the Offer (other than the Minimum Condition) have been satisfied or waived, (2) upon the conversion by the Stockholder of its Covered Shares into Company Common Stock and the conversion by the Other Stockholder of the shares of Company Stock owned by it into Company Common Stock, the Minimum Condition will have been satisfied, and (3) Merger Sub stands ready to, and will, immediately following such conversion by the Stockholder and the Other Stockholder, accept for payment all shares of Company Common Stock validly tendered in the Offer and not theretofore withdrawn (all of the foregoing documents, the “Tender Documents”).

(b) The Stockholder hereby agrees that once the Tender Documents shall have been delivered to the Depositary, the Stockholder will not withdraw, nor permit the withdrawal of, any Tender Documents from the Offer, unless and until (i) the Offer shall have been terminated by Merger Sub in accordance with the terms of the Merger Agreement, or (ii) this Agreement shall have been terminated in accordance with Section 6.1.

(c) Notwithstanding the provisions of Sections 2.1(a) and 2.1(b), in the event of a Change in Recommendation made in compliance with the Merger Agreement, the obligation of the Stockholder to tender and not withdraw its Covered Shares in the manner set forth in this Section 2.1 shall only apply to an aggregate number of Covered Shares that is equal to 30% of the total number of shares of Company Stock outstanding on the Acceptance Date, and the Stockholder may or may not tender the balance of its Covered Shares in the Offer, and may withdraw from the Offer all or any portion of such balance of its Covered Shares that it may previously have tendered, as the Stockholder, in its sole discretion, determines.

ARTICLE III

VOTING

3.1. Agreement to Vote.

(a) The Stockholder hereby irrevocably and unconditionally agrees that during the period beginning on the date hereof and ending on the earliest of (x) the Operative Date, (y) the termination of the Merger Agreement in accordance with its terms or (z) the termination of this Agreement in accordance with its terms, at the Company Stockholders Meeting and at any other meeting of the stockholders of the Company, however called, including any adjournment or postponement thereof, and in connection with any written consent of the stockholders of the Company, the Stockholder shall, in each case, to the fullest extent that such matters are submitted for the vote or written consent of the Stockholder and that the Covered Shares are entitled to vote thereon or consent thereto:

(i) appear at each such meeting or otherwise cause the Covered Shares as to which the Stockholder controls the right to vote to be counted as present thereat for purposes of calculating a quorum; and

(ii) vote (or cause to be voted), in person or by proxy, or deliver (or cause to be delivered) a written consent covering, all of the Covered Shares as to which the Stockholder controls the right to vote (or, if applicable, only such portion of the Covered Shares as is provided in Section 3.1(b)) (i) in favor of the adoption of the Merger Agreement and any related proposal in furtherance thereof, as reasonably requested by Parent, submitted for the vote or written consent of stockholders; (ii) against any action or agreement submitted for the vote or written consent of stockholders that the Stockholder knows is in opposition to, or competitive or materially inconsistent with, the Offer or the Merger or that the Stockholder knows would result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company contained in the Merger Agreement, or of the Stockholder contained in this Agreement; and (iii) against any Acquisition Proposal and against any other action, agreement or transaction submitted for the vote or written consent of stockholders that the Stockholder knows would impede, interfere with, delay, postpone, discourage, frustrate the purposes of or adversely affect the Offer, the Merger or the other transactions contemplated by the Merger Agreement or this Agreement or the performance by the Company of its obligations under the Merger Agreement or by the Stockholder of its obligations under this Agreement, including, but not limited to: (A) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any subsidiary of the Company; (B) any sale, lease or transfer of a material amount of assets of the Company (including capital stock or other equity interest in its Subsidiaries) or any subsidiary of the Company; (C) any reorganization, recapitalization, dissolution or liquidation of the Company or any subsidiary of the Company; (D) any change in a majority of the board of directors of the Company; (E) any amendment to the Company’s certificate of incorporation or bylaws (except for any amendment to increase the authorized capital stock); and (F) any change in the capitalization of the Company or the Company’s corporate structure.

The obligations of the Stockholder specified in this Section 3.1(a) shall apply whether or not the Offer, the Merger or any action described above is recommended by the Board of Directors of the Company. Any such vote shall be cast (or consent shall be given) by the Stockholder in accordance with such procedures relating thereto so as to ensure that it is duly counted, including for purposes of determining whether a quorum is present.

(b) Notwithstanding the provisions of Section 3.1(a), in the event of a Change in Recommendation made in compliance with the Merger Agreement, the obligation of the Stockholder to vote (or cause to be voted), or to deliver (or cause to be delivered) a written consent with respect to, the Covered Shares in the manner set forth in this Section 3.1 shall, with respect to any combined vote of holders of Company Common Stock and Company Convertible Preferred Stock, only apply to an aggregate number of Covered Shares entitled to vote in respect of such matter that is equal to 30% of the total vote of the shares of Company Stock entitled to vote in respect of such matter, and shall terminate, together with the authority of each of the proxies set forth in Section 3.3, with respect to the balance of the Covered Shares, and the Stockholder may vote (or cause to be voted), or deliver (or cause to be delivered) a written consent with respect to, such balance of its Covered Shares as the Stockholder, in its sole discretion, determines.

3.2. No Inconsistent Agreements. The Stockholder hereby covenants and agrees that, except for this Agreement or as set forth in Section 7 of the Certificate of Designations, and except as may be permitted by Section 5.4(b), it (a) has not entered into, and shall not enter into at any time while this Agreement remains in effect, any voting agreement or voting trust with respect to the Covered Shares with respect to any of the matters described in Section 3.1(a)(ii) (the “Section 3.1(a) Matters”), (b) has not granted, and shall not grant at any time while this Agreement remains in effect (except pursuant to Section 3.3), a proxy, consent or power of attorney with respect to the Covered Shares with respect to any of the Section 3.1(a) Matters and (c) has not knowingly taken and shall not knowingly take any action that would make any representation or warranty of the Stockholder contained herein untrue or incorrect or have the effect of preventing or disabling the Stockholder from performing any of its obligations under this Agreement.

this Agreement in accordance with its terms, in which event this proxy shall automatically be revoked without any further action by any party. The Stockholder will take such further action or execute such other instruments as may be necessary to effectuate the intent of this proxy and hereby revokes any proxy previously granted by it with respect to the Covered Shares with respect to any of the Section 3.1(a) Matters. So long as the proxy granted under this Section 3.3 is a valid uncontested proxy that is effective to deliver the votes of the Covered Shares (or, if applicable, only such portion of the Covered Shares as is provided in Section 3.1(b)), the Stockholder shall be deemed to be fulfilling its obligations under Section 3.1. If Parent believes that such proxy is not a valid proxy or if Parent otherwise does not wish to utilize the proxy, Parent will so notify the Stockholder in writing so that the Stockholder will be able to perform its obligations under Section 3.1.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

4.1. Representations and Warranties of the Stockholder. The Stockholder hereby represents and warrants to Parent as follows:

(a) Organization; Authorization; Validity of Agreement; Necessary Action . The Stockholder is duly organized and is validly existing and in good standing under the laws of the jurisdiction of its formation. The Stockholder has full power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by the Stockholder of this Agreement, the performance by it of its obligations hereunder and the consummation by it of the transactions contemplated hereby have been duly and validly authorized by the Stockholder and no other actions or proceedings on the part of the Stockholder or any stockholder thereof are necessary to authorize the execution and delivery by it of this Agreement, the performance by it of its obligations hereunder or the consummation by it of the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Stockholder and, assuming this Agreement constitutes a valid and binding obligation of the other parties hereto, constitutes a legal, valid and binding obligation of the Stockholder, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or similar laws affecting the rights of creditors generally and the availability of equitable remedies (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(b) Ownership. The Stockholder’s Existing Shares are, and all of the Covered Shares owned by the Stockholder from the date hereof through and on the Operative Date will be, Beneficially Owned and owned of record by the Stockholder, except that, in the case of the Offer, the Company Convertible Preferred Stock will have been converted into Company Common Stock in accordance with the terms of this Agreement. The Stockholder has good and marketable title to the Stockholder’s Existing Shares, free and clear of any Encumbrances. As of the date hereof, the Stockholder’s Existing Shares constitute all of the shares of Company Stock Beneficially Owned or owned of record by the Stockholder. Except for the rights granted to Parent hereby, the Stockholder has and will have at all times through the Operative Date sole voting power (including the right to control such vote as contemplated herein) with respect to the Section 3.1(a) Matters, sole power of disposition, sole power to issue instructions with respect to

the Section 3.1(a) Matters, and sole power to agree to all of the matters set forth in this Agreement, in each case, with respect to all of the Stockholder’s Existing Shares and with respect to all of the Covered Shares owned by the Stockholder at all times through the Operative Date.

(c) No Violation. The execution, delivery and performance of this Agreement by the Stockholder does not and will not (whether with or without notice or lapse of time, or both) (i) violate any provision of the certificate of formation or bylaws or other comparable governing documents, as applicable, of the Stockholder, (ii) violate, conflict with or result in the breach of any of the terms or conditions of, result in any (or the right to make any) modification of or the cancellation or loss of a benefit under, require any notice, consent or action under, or otherwise give any Person the right to terminate, accelerate obligations under or receive payment or additional rights under, or constitute a default under, any Contract to which the Stockholder is a party or by which it is bound or (iii) violate any Law applicable to the Stockholder or by which any of the Stockholder’s assets or properties is bound, except for any of the foregoing as would not, either individually or in the aggregate, impair the ability of the Stockholder to perform its obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.

(d) Consents and Approvals. Other than compliance with applicable securities laws and Laws relating to competition (including any filing under the HSR Act), the execution and delivery of this Agreement by the Stockholder does not, and the performance by the Stockholder of its obligations under this Agreement and the consummation by it of the transactions contemplated hereby will not, require the Stockholder to obtain any consent, approval, authorization or permit of, or to make any filing with or notification to, any Governmental Entity, except where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, either individually or in the aggregate, prevent or delay the performance by the Stockholder of any of its obligations under this Agreement.

(e) Absence of Litigation. As of the date hereof, there is no Action pending or, to the knowledge of the Stockholder, threatened against the Stockholder or any of its Affiliates before or by any Governmental Entity that would impair the ability of the Stockholder to perform its obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.

(f) Finder’s Fees. Except as disclosed pursuant to the Merger Agreement, no investment banker, broker, finder or other intermediary is entitled to a fee or commission from Parent, US Corp., Merger Sub or the Company in respect of this Agreement based upon any arrangement or agreement made by or at the direction of the Stockholder.

(g) Reliance by Parent, US Corp. and Merger Sub. The Stockholder understands and acknowledges that Parent, US Corp. and Merger Sub are entering into the Merger Agreement in reliance upon the Stockholder’s execution and delivery of this Agreement and the representations and warranties of the Stockholder contained herein.

ARTICLE V

OTHER COVENANTS

5.1. Prohibition on Transfers, Other Actions.

(a) Except as permitted by Section 5.4(b), the Stockholder hereby agrees not to (i) Transfer any of the Covered Shares, Beneficial Ownership thereof or any other interest specifically therein (including by tendering into another tender or exchange offer), except to participate in the Offer or the Merger; (ii) enter into any agreement, arrangement or understanding with any Person (other than Parent, US Corp. or Merger Sub), or knowingly take any other action, that violates or conflicts with the Stockholder’s representations, warranties, covenants and obligations under this Agreement; or (iii) knowingly take any action that could restrict or otherwise affect the Stockholder’s legal power, authority and right to comply with and perform its covenants and obligations under this Agreement. Any Transfer in violation of this provision shall be void.

(b) The Stockholder hereby covenants and agrees that for a period of one year following the Operative Date (the “Lock-Up Period”), the Stockholder shall not Transfer, or consent to any Transfer of, any shares of Parent Common Stock, or any interest therein, or enter into any Contract, option or other arrangement (including any profit sharing or other derivative arrangement) with respect to the Transfer of, any shares of Parent Common Stock or any interest therein to any person; provided that the Stockholder may participate during the Lock-Up Period with respect to its shares of Parent Common Stock in any merger, tender offer or other business combination or other transaction, in each case, which the Board of Directors of Parent has recommended to Parent’s stockholders. The Stockholder hereby agrees that, in order to ensure compliance with the restrictions referred to herein, Parent may issue appropriate “stop transfer” instructions to its transfer agent in respect of the Stockholder’s Parent Common Stock. Parent agrees that it will cause any stop transfer instructions imposed pursuant to this Section 5.1(b) to be lifted, and any legended certificates of Parent Common Stock delivered to the Stockholder pursuant to the Merger Agreement to be replaced with certificates not bearing such legend, promptly following the termination of the Lock-Up Period. The restrictions on transfer provided in this Section 5.1(b) shall be in addition to any restrictions on transfer of the Parent Common Stock imposed by any applicable Laws.

5.2. Registration Rights Agreement. Concurrently with the execution of this Agreement, Parent and the Stockholder are entering into a Registration Rights Agreement (the “Registration Rights Agreement”).

5.3. Stock Dividends, etc. In the event of a stock split, stock dividend or distribution, or any change in the Company Stock by reason of any split-up, reverse stock split, recapitalization, combination, reclassification, exchange of shares or the like, the terms “Existing Shares” and “Covered Shares” shall be deemed to refer to and include such shares as well as all such stock dividends and distributions and any securities into which or for which any or all of such shares may be changed or exchanged or which are received in such transaction.

5.4. No Solicitation.

(a) The Stockholder hereby agrees that during the term of this Agreement, except as permitted by Section 5.4(b), it shall not, and shall use its reasonable best efforts to ensure that any of its Affiliates or Representatives do not, directly or indirectly, (i) solicit, initiate, knowingly encourage or facilitate (including by way of furnishing non-public information) the submission of an Acquisition Proposal or any proposal, offer or inquiry that may reasonably be expected to lead to an Acquisition Proposal, (ii) participate or enter into or engage in negotiations or discussions with, or provide any non-public information or data to, any person (other than Parent or any of its affiliates or representatives) relating to any Acquisition Proposal or any proposal, offer or inquiry that may reasonably be expected to lead to an Acquisition Proposal, (iii) make or participate in, directly or indirectly, a “solicitation” of “proxies” (as such terms are used in the rules of the SEC) or powers of attorney or similar rights to vote, or seek to advise or influence any Person with respect to the voting of, any shares of Company Stock in connection with any vote or other action on any of the Section 3.1(a) Matters, other than to recommend that stockholders of the Company vote in favor of the adoption of the Merger Agreement and as otherwise expressly provided in this Agreement or to otherwise vote or consent with respect to Covered Shares in a manner that would not violate Section 3.1, (iv) vote, approve, adopt or recommend, or publicly propose to approve, adopt or recommend, any letter of intent, memorandum of understanding, agreement, option agreement or other agreement relating to an Acquisition Proposal or any proposal, offer or inquiry that may reasonably be expected to lead to an Acquisition Proposal, or (v) agree to do any of the foregoing. The Stockholder hereby agrees immediately to cease and cause to be terminated all existing solicitations, discussions or negotiations with any Person with respect to any Acquisition Proposal or any offer, proposal or inquiry that may reasonably be expected to lead to an Acquisition Proposal, and will inform its Affiliates and Representatives of the obligations undertaken by the Stockholder pursuant to this Agreement, including this Section 5.4(a). If any of the Stockholder’s Affiliates or Representatives takes any action that the Stockholder is not permitted to take under this Section 5.4, it shall be deemed to be a breach of this Section 5.4 by the Stockholder. Notwithstanding anything in this Agreement (including the immediately preceding sentence) to the contrary, no action taken by the Company or any of its Affiliates or Representatives in compliance with Section 6.2 of the Merger Agreement shall be a violation by the Stockholder of this Section 5.4(a).

(b) Notwithstanding anything contained in this Agreement to the contrary, in the event that the Company Board of Directors exercises its rights under Section 6.2 of the Merger Agreement to (i) furnish information concerning, and provide access to, the Company’s business, properties, employees and assets to any Person or Persons (and their Representatives acting in such capacity), and/or (ii) participate, engage or assist in discussions and negotiations with any Person or Persons (and their Representatives acting in such capacity), in each case, in compliance with Section 6.2 of the Merger Agreement, then (x) the Stockholder and its Representatives likewise may furnish any such information to such Person or Persons, provide such Person or Persons with any such access, and/or participate, engage or assist in any such discussions and negotiations with such Person or Persons; provided that any action taken by the Stockholder shall be taken only in coordination with the Company Board of Directors, and (y) in connection with the Company’s termination of the Merger Agreement pursuant to Section 9.1(f) thereof in order to enter into a transaction which is a Superior Proposal, the Stockholder shall be

entitled to enter into a voting or other support agreement with the Person making the Superior Proposal, provided that the effectiveness of such agreement shall be conditioned on the termination of the Merger Agreement in compliance with Section 6.2(c) thereof.

5.5. Notice of Acquisitions; Proposals Regarding Prohibited Transactions. The Stockholder hereby agrees to notify Parent in writing (a) as promptly as practicable (and in any event within one business day following such acquisition by the Stockholder) of the number of any additional shares of Company Stock or other securities of the Company of which the Stockholder acquires Beneficial Ownership on or after the date hereof and (b) as promptly as practicable (and in any event within the earlier of (i) one business day or (ii) 48 hours) after receipt by the Stockholder of any Acquisition Proposal or any offer, proposal or inquiry that may reasonably be expected to lead to an Acquisition Proposal or after any request for information is sought from or initiated with the Stockholder, and shall disclose the material terms of such Acquisition Proposal, proposal, offer or inquiry, including the identity of the Person or Persons making such Acquisition Proposal, proposal, offer or inquiry (unless prohibited by the confidentiality agreement with such Person) and provide a copy thereof if in writing and any related available material documentation or correspondence. The Stockholder will keep Parent informed on a prompt basis of the status and any material discussions or negotiations (including material amendments and proposed material amendments) relating to any Acquisition Proposal or any such offer, proposal or inquiry.

5.6. Stockholder Profit.

(a) In the event that the Merger Agreement shall have been terminated under circumstances in which a Termination Fee is payable or may be payable by the Company to Parent with respect to such termination upon the occurrence of certain events specified in the Merger Agreement, but in each case, subject to such Termination Fee actually becoming payable under the Merger Agreement, the Stockholder shall pay to Parent an amount equal to 50% of the Stockholder’s profit (determined in accordance with Section 5.6(b) below) from the sale or other Transfer of any Covered Shares pursuant to an Acquisition Proposal (including a Superior Proposal) so long as the agreement with respect to such Acquisition Proposal is entered into or such Acquisition Proposal is consummated within 12 months of the termination of this Agreement. Payment shall be made promptly upon the receipt by the Stockholder of the proceeds from such sale or other disposition and shall only be required to be paid if such sale or other disposition is completed or, if later, when the Termination Fee is paid.

(b) For purposes of this Section 5.6, the profit of the Stockholder shall equal (A) the aggregate consideration for or on account of the Covered Shares that were sold or otherwise Transferred as described in Section 5.6(a) including extraordinary distributions directly or indirectly made in connection with any Acquisition Proposal, valuing any non-cash consideration (including any residual interest in the Company) at its fair market value on the date of such consummation, less (B) the product of (x) $11.50 and (y) the number of Covered Shares so sold or otherwise Transferred by the Stockholder.

(i) securities listed on a national securities exchange or traded or quoted on the Nasdaq (“Traded Securities”) shall be equal to the average closing price per share of such security as reported on the composite trading system of such exchange or by Nasdaq for the five trading days ending on the trading day immediately prior to the date of the value determination (the “Valuation Period”); and

(ii) consideration which is other than cash or Traded Securities shall be determined by a nationally recognized independent investment banking firm mutually agreed upon by Parent and the Stockholder within ten business days of the event requiring selection of such banking firm; provided, however, that if the parties are unable to agree within two business days after the date of such event as to the investment banking firm, then the parties shall each select one firm, and those firms shall select a third investment banking firm, which third firm shall make such determination; provided, further, that the fees and expenses of such investment banking firm shall be borne equally by Parent and the Stockholder. The determination of the investment-banking firm shall be binding upon the parties.

(d) Any payment of profit under this Section 5.6 shall be paid in the same proportion of cash and non-cash consideration as the aggregate consideration received by the Stockholder in the Acquisition Proposal or other disposition.

(e) In the event that the Merger Agreement shall have been terminated under circumstances in which a Termination Fee is payable or may be payable by the Company to Parent with respect to such termination upon the occurrence of certain events specified in the Merger Agreement, then the Stockholder shall not, until the 12-month anniversary of the termination of this Agreement, Transfer any of the Covered Shares (i) to its limited partners or (ii) to any of its Affiliates unless such Affiliate agrees in writing to be bound by the provisions of this Section 5.6.

(f) Neither the Stockholder nor Parent shall, and each shall use its reasonable best efforts to ensure that its respective Affiliates do not, engage in any Prohibited Activity with respect to any subject Traded Securities during an applicable Valuation Period. “Prohibited Activity” means any acquisition or disposition, in open market transactions, private transactions or otherwise, during the Valuation Period of any of the subject Traded Securities or any securities convertible into or exchangeable for or derivative of the subject Traded Securities or any other action, in the case of any of the foregoing, taken intentionally for the purpose of manipulating the price of the subject Traded Securities during the Valuation Period.

as a stockholder of the Company or any of its Subsidiaries; except with respect to any such Claims arising under this Agreement, the Merger Agreement, the Registration Rights Agreement and the transactions contemplated hereby and thereby, and any Claim by the Stockholder for failure by the Company to pay all accrued and unpaid dividends on the Company Convertible Preferred Stock prior to the Operative Date.

5.8. Waiver of Appraisal Rights. The Stockholder agrees not to exercise any rights of appraisal or any dissenters’ rights that the Stockholder may have (whether under applicable Law or otherwise) or could potentially have or acquire in connection with the Merger.

5.9. Further Assurances. From time to time, at Parent’s request and without further consideration, the Stockholder shall execute and deliver such additional documents and take all such further action as may be reasonably necessary to effect the actions and consummate the transactions contemplated by this Agreement.

5.10. Disclosure. Neither Parent, the Company nor the Stockholder will issue any press release or make any other public statement, and shall not authorize or permit any of its Subsidiaries or Affiliates or any of its or their Representatives to issue any press release or make any other public statement with respect to the Merger Agreement, this Agreement, the Registration Rights Agreement or any of the transactions contemplated by the Merger Agreement, this Agreement or the Registration Rights Agreement without the prior written consent of the other parties hereto (such consent not to be unreasonably withheld, conditioned or delayed), except as may be required by Law or by any listing requirement with the Nasdaq or the Toronto Stock Exchange, including any filings required under the Securities Act or the Exchange Act.

5.11. Meeting Rights. During the Lock-Up Period, the Stockholder shall be entitled to meet one time in each calendar quarter with the Chief Executive Officer and the Chief Financial Officer of Parent (the “Meeting Right”). The Stockholder may exercise the Meeting Right by providing written notice to Parent at least ten business days in advance of any such meeting. The time, place and method of each meeting shall be as reasonably agreed by the parties. The Other Stockholder shall be entitled to attend any such meeting.

5.12. Rule 144. Parent agrees to use its reasonable best efforts to file all reports required to be filed by it under the Exchange Act to the extent required to enable the Stockholder, after the expiration of the Lock-Up Period, to sell the Parent Common Stock pursuant to and in accordance with Rule 144.

5.13. Affiliate Agreements. The Stockholder shall take all actions necessary to cause (a) the Registration Rights Agreement, dated as of March 19, 2004, by and among the Company, the Stockholder, the Other Stockholder, and such other persons who became signatories thereto as provided therein and (b) the Management Rights Letter, dated as of March 19, 2004, by and between the Stockholder and the Company to be terminated (without any payment), effective as of and contingent upon the earlier to occur of the Acceptance Date and the Effective Time, such that such agreements shall be of no further force or effect immediately thereafter. The Stockholder has approved the Certificate of Amendment. The Stockholder hereby waives its right of first offer under the Amended and Restated Preferred Stock Purchase Agreement, dated

as of November 26, 2003, by and between the Company and the Stockholder, in connection with the Merger Agreement and the transactions contemplated thereby.

ARTICLE VI

MISCELLANEOUS

6.1. Termination. This Agreement shall remain in effect until the earliest to occur of (i) the termination of the Merger Agreement in accordance with its terms, and (ii) the delivery of written notice of termination by the Stockholder to Parent following any Fundamental Amendment effected without the prior written consent of the Stockholder, and upon the occurrence of the earliest of such events this Agreement shall terminate and be of no further force; provided, however, that the provisions of Section 5.6, this Section 6.1, the last sentence of Section 6.2(a) and Sections 6.4 through 6.13 shall survive any termination of this Agreement. Nothing in this Section 6.1 and no termination of this Agreement shall relieve or otherwise limit any party of liability for willful breach of this Agreement. “Fundamental Amendment” means the execution by the Company, Parent, US Corp. and Merger Sub of an amendment to, or waiver by the Company, Parent, US Corp. or Merger Sub of any provision of, the Offer or the Merger Agreement that reduces the amount of the Offer Price or the Merger Consideration, changes the form of the Offer Price or the Merger Consideration to include or substitute therefor a form other than cash and Parent Common Stock, or decreases the ratio of cash to Parent Common Stock included in the Offer Price or the Merger Consideration. If the Stockholder does not exercise the termination right described above within five business days following the date the Stockholder is notified that such Fundamental Amendment is effected, then this Agreement shall give effect to any modified terms incorporated from the Merger Agreement and, except as so modified, shall continue in full force and effect.

6.2. Legends; Stop Transfer Order.

(a) In furtherance of this Agreement, the Stockholder hereby authorizes and instructs the Company to instruct its transfer agent to enter a stop transfer order with respect to all of the Covered Shares held of record by the Stockholder and to legend the share certificates. The Company agrees that as promptly as practicable after the date of this Agreement it shall give such stop transfer instructions to the transfer agent for the Company Stock and to legend the share certificates. The Company agrees that, (i) if this Agreement is terminated in accordance with Section 6.1, then, promptly following the termination of this Agreement, (ii) if Merger Sub accepts the Covered Shares for payment pursuant to the terms of the Offer, then, concurrently with such acceptance (and in any event within such time as would not delay receipt by the Stockholder of the Offer Price), or (iii) if the transactions contemplated by the Merger Agreement are effected as a One Step Merger, then, immediately following the Closing (and in any event within such time as would not delay receipt by the Stockholder of the Merger Consideration), the Company will cause any stop transfer instructions imposed pursuant to this Section 6.2 to be lifted and any legended certificates delivered pursuant to this Section 6.2 to be replaced with certificates not bearing such legend.

(b) Each certificate representing Covered Shares held of record by the Stockholder shall bear the following legend on the face thereof:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON VOTING, TRANSFER AND CERTAIN OTHER LIMITATIONS SET FORTH IN THAT CERTAIN STOCKHOLDER AGREEMENT DATED AS OF FEBRUARY 25, 2008, AMONG SXC HEALTH SOLUTIONS CORP., NEW MOUNTAIN PARTNERS, L.P. AND NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC., AS THE SAME MAY BE AMENDED FROM TIME TO TIME, COPIES OF WHICH STOCKHOLDER AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.”

The Stockholder will cause all of its Existing Shares held of record by the Stockholder and any securities that become Covered Shares held of record by the Stockholder after the date hereof to be delivered to the Company for the purpose of applying such legend (if not so endorsed upon issuance). The Company shall return to the delivering party, as promptly as possible, any securities so delivered. The delivery of such securities by the delivering party shall not in any way affect such party’s rights with respect to such securities.

6.3. No Ownership Interest. Nothing contained in this Agreement shall be deemed to vest in Parent any direct or indirect ownership or incidence of ownership of or with respect to any Covered Shares, except as otherwise provided herein. All rights, ownership and economic benefits of and relating to the Covered Shares shall remain vested in and belong to the Stockholder, and Parent shall have no authority to direct the Stockholder in the voting or disposition of any of the Covered Shares, except as otherwise provided herein.

6.4. Notices.

(a) All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, by facsimile (upon telephonic confirmation of receipt), on the first business day following the date of dispatch if delivered by a recognized next day courier service or on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, post prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing in accordance with this Section 6.4 by the party to receive such notice.

(i)

if to Parent, to:

SXC Health Solutions Corp.
2441 Warrenville Road, Suite 610
Lisle, IL 60532-3246
Fax: (630) 328-2190
Attention: Chief Financial Officer

with a copy to:

Sidley Austin LLP
1 South Dearborn Street
Chicago, IL 60603
Fax: (312) 853-7036

Attention: Gary D. Gerstman
Scott R. Williams

(ii)

if to the Company, to:

National Medical Health Card Systems, Inc.
26 Harbor Park Drive
Port Washington, NY 11050
Fax: (516) 605-6989
Attention: George McGinn, Esq.

with a copy to:

Bass, Berry & Sims PLC
315 Deaderick Street, Suite 2700
Nashville, TN 37238
Fax: (615) 742-6293
Attention: J. Allen Overby, Esq.
Jennifer H. Noonan, Esq.

(iii)

if to the Stockholder, to:

New Mountain Partners, L.P.
787 Seventh Avenue, 49th Floor
New York, NY 10019
Fax: (212) 582-2277
Attention: Mr. Michael B. Ajouz

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, NY 10004
Fax: (212) 859-4000
Attention: Aviva F. Diamant, Esq.

(b) A copy of all notices and other communications from Parent or Merger Sub to the Company (and vice versa) under the Merger Agreement shall be sent at the same time to the Stockholder at the above address, with a copy to its counsel at the above address, and the provisions of this Section 6.4 shall apply to such notices and communications; provided that no failure to provide such notice to the Stockholder shall relieve the Stockholder of its obligations under this Agreement.

Agreement, they shall be deemed to be followed by the words “without limitation.” The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. This Agreement is the product of negotiation by the parties having the assistance of counsel and other advisers. It is the intention of the parties that this Agreement not be construed more strictly with regard to one party than with regard to the others.

6.6. Counterparts. This Agreement may be executed by facsimile and in counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

6.7. Entire Agreement. This Agreement, the Registration Rights Agreement and, to the extent referenced herein, the Merger Agreement, together with the several agreements and other documents and instruments referred to herein or therein or annexed hereto or thereto, embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written and oral, that may have related to the subject matter hereof in any way.

6.8. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. (a) This Agreement, and all claims or causes of action (whether at law, in contract or in tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance hereof, shall be governed by and construed in accordance with the Laws of the State of Delaware, without giving effect to any choice or conflict of Law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Delaware. The parties agree that irreparable damage would occur and that the parties would not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Court of Chancery of the State of Delaware (and any appellate court of the State of Delaware) and the Federal courts of the United States of America located in the State of Delaware, this being in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any Action with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (c) to the fullest extent permitted by applicable Law, that (i) the Action in any such court is brought in an inconvenient forum, (ii) the venue of such Action is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

(b) Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any Action arising out of or relating to this Agreement. Each party hereto (i) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such party would not, in the event of any Action, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other parties hereto have been induced to enter into this Agreement, by, among other things, the mutual waiver and certifications in this Section 6.8.

6.9. Amendment; Waiver; Expenses.

(a) This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto. Each party may waive any right of such party hereunder by an instrument in writing signed by such party and delivered to Parent, the Company and the Stockholder.

(b) The Stockholder agrees that it is solely responsible (without reimbursement from the Company) for all costs and expenses (including all fees and expenses of counsel) incurred by the Stockholder in connection with this Agreement and the Registration Rights Agreement.

6.10. Remedies. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party.

6.11. Severability. Any term or provision of this Agreement which is determined by a court of competent jurisdiction to be invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction, and if any provision of this Agreement is determined to be so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable, in all cases so long as neither the economic nor legal substance of the transactions contemplated hereby is affected in any manner adverse to any party or its stockholders or partners, as applicable. Upon any such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties as closely as possible and to the end that the transactions contemplated hereby shall be fulfilled to the maximum extent possible.

6.12. Successors and Assigns; Third Party Beneficiaries. Neither this Agreement nor any of the rights or obligations of any party under this Agreement shall be assigned, in whole or in part (by operation of law or otherwise), by any party without the prior written consent of the other parties hereto. Subject to the foregoing, this Agreement shall bind and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement.

6.13. Stockholder Capacity. The restrictions and covenants of the Stockholder hereunder shall not be binding, and shall have no effect, in any way with respect to any director or officer of the Company or any of its Subsidiaries in such Person’s capacity as such a director or officer, nor shall any action taken by any such director or officer in his or her capacity as such be deemed a breach by the Stockholder of this Agreement.

[Remainder of this page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed (where applicable, by their respective officers or other authorized Person thereunto duly authorized) as of the date first written above.


		SXC HEALTH SOLUTIONS CORP.

		By:		/s/ Jeffrey Park
		Name:		Jeffrey Park
		Title:		Chief Financial Officer

		NEW MOUNTAIN PARTNERS, L.P.

		By:		New Mountain Investments, L.P.,
				its general partner

		By:		New Mountain GP, LLC,
				its general partner

		By:		/s/ Steven B. Klinsky

		Name:		Steven B. Klinsky
		Title:		Chief Executive Officer

		NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.

		By:		/s/ George McGinn

		Name:		George McGinn
		Title:		General Counsel and Secretary

ANNEX A

IRREVOCABLE PROXY

Dated as of February 25, 2008

The undersigned Stockholder (the “Stockholder”) of National Medical Health Card Systems, Inc., a Delaware corporation (the “Company”), hereby irrevocably (to the fullest extent permitted by law) appoints Gordon Glenn and Jeffrey Park, as the sole and exclusive attorneys and proxies of the undersigned, with full power of substitution and resubstitution, to vote and exercise all voting and related rights (to the full extent that the undersigned is entitled to do so) with respect to all of the shares of capital stock of the Company that now are or hereafter may be beneficially owned by the undersigned, and any and all other shares or securities of the Company issued or issuable in respect thereof on or after the date hereof (collectively, the “Covered Shares”), in accordance with the terms of this Proxy. The Covered Shares beneficially owned by the Stockholder as of the date of this Proxy are listed on the signature page of this Proxy, along with the number(s) of the stock certificate(s) representing such Covered Shares. Upon the Stockholder’s execution of this Proxy, any and all prior proxies given by the undersigned with respect to any Covered Shares are hereby revoked and terminated, and the Stockholder agrees not to grant any subsequent proxies with respect to the Covered Shares, with respect to any of the matters referred to in any of clauses (a) through (c) below until after the Expiration Time (as defined below).

This Proxy is irrevocable (to the fullest extent permitted by law), is coupled with an interest and is granted pursuant to that certain Stockholder Agreement of even date herewith (the “Stockholder Agreement”) by and among SXC Health Solutions Corp., a corporation organized under the laws of Yukon Territory, Canada (“Parent”), the Company and the undersigned Stockholder of the Company, and is granted in consideration of Parent entering into that certain Agreement and Plan of Merger of even date herewith (as it may hereafter be amended from time to time in accordance with the provisions thereof, the “Merger Agreement”) by and among Parent, SXC Health Solutions, Inc., a Texas corporation (“US Corp.”), Comet Merger Corporation, a newly-formed Delaware corporation that is wholly-owned by US Corp. and an indirect wholly-owned subsidiary of Parent (“Merger Sub”), and the Company. The Merger Agreement provides that Merger Sub will commence an exchange offer (the “Offer”) to acquire all of the outstanding shares of common stock, par value $0.001 per share, of the Company (“Company Common Stock”), and following the consummation of the Offer (or, subject to certain conditions, in lieu thereof), Merger Sub will merge with and into the Company (the “Merger”) and the Stockholder will be entitled to receive the merger consideration specified therein. The term “Expiration Time”, as used in this Proxy, shall mean the earliest to occur of (i) the Operative Date, (ii) the termination of the Merger Agreement in accordance with its terms, and (iii) the termination of the Stockholder Agreement in accordance with its terms.

Covered Shares (or, if applicable, only such portion of the Covered Shares as is provided in Section 3.1(b) of the Stockholder Agreement) (including, without limitation, the power to execute and deliver written consents) at every annual or special meeting of stockholders of the Company (and at every adjournment or postponement thereof), and in every written consent in lieu of such meeting:

(a) in favor of the adoption of the Merger Agreement and any related proposal in furtherance thereof, as reasonably requested by Parent, submitted for the vote or written consent of stockholders;

(b) against any action or agreement submitted for the vote or written consent of stockholders that the Stockholder knows is in opposition to, or competitive or materially inconsistent with, the Offer or the Merger or that the Stockholder knows would result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company contained in the Merger Agreement, or of the Stockholder contained in the Stockholder Agreement; and

(c) against any Acquisition Proposal (as defined in the Merger Agreement) and against any other action, agreement or transaction submitted for the vote or written consent of stockholders that the Stockholder knows would impede, interfere with, delay, postpone, discourage, frustrate the purposes of or adversely affect the Offer or the Merger or the other transactions contemplated by the Merger Agreement or the Stockholder Agreement or the performance by the Company of its obligations under the Merger Agreement or by the Stockholder of its obligations under the Stockholder Agreement, including, but not limited to: (A) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any subsidiary of the Company; (B) any sale, lease or transfer of a material amount of assets of the Company (including capital stock or other equity interests in its Subsidiaries) or any subsidiary of the Company; (C) any reorganization, recapitalization, dissolution or liquidation of the Company or any subsidiary of the Company; (D) any change in a majority of the board of directors of the Company; (E) any amendment to the Company’s certificate of incorporation or bylaws (except for any amendment to increase the authorized capital stock); and (F) any change in the capitalization of the Company or the Company’s corporate structure.

Any term or provision of this Proxy that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Stockholder agrees that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Proxy shall be enforceable as so modified. In the event such court does not exercise the power granted to it in the prior sentence, the Stockholder agrees to replace such invalid or unenforceable term or provision with

a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.

The restrictions and covenants of the Stockholder hereunder shall not be binding, and shall have no effect, in any way with respect to any director or officer of the Company or any of its Subsidiaries in such Person’s capacity as such a director or officer, nor shall any action taken by any such director or officer in his or her capacity as such be deemed a breach by the Stockholder of this Proxy.

Any obligation of the Stockholder hereunder shall be binding upon the successors and assigns of the Stockholder.

This Proxy shall terminate, and be of no further force and effect, automatically upon the Expiration Time.

[signature page follows]

COUNTERPART SIGNATURE PAGE

IN WITNESS WHEREOF, the Stockholder has caused this Irrevocable Proxy to be duly executed as of the day and year first above written.


		NEW MOUNTAIN PARTNERS, L.P.

		By:		New Mountain Investments, L.P.,
				its general partner

		By:		New Mountain GP, LLC,
				its general partner

		By:
		Name:		Steven B. Klinsky
		Title:		Chief Executive Officer

NUMBER OF OUTSTANDING SHARES OF COMPANY STOCK BENEFICIALLY OWNED BY THE STOCKHOLDER:


SERIES A 7% CONVERTIBLE PREFERRED STOCK		6,790,797

COMMON STOCK		6,790,797 (upon conversion)

Stockholder Address:

New Mountain Partners, L.P.
787 Seventh Avenue, 49th Floor
New York, NY 10019
Attention: Mr. Michael B. Ajouz
Fax: (212) 582-2277

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, NY 10004
Attention: Aviva F. Diamant, Esq.
Fax: (212) 859-4000

EX-99.8 3 ad99_8.htm PROXY ad99_8.htm

Exhibit 99.8

IRREVOCABLE PROXY

Dated as of February 25, 2008

The attorneys and proxies named above, and each of them, are hereby authorized and empowered by the Stockholder, at any time prior to the Expiration Time, to act as the Stockholder’s attorney and proxy to vote all of the Covered Shares (or, if applicable, only such portion of the Covered Shares as is provided in Section 3.1(b) of the Stockholder Agreement), and to exercise all voting, consent and similar rights of the undersigned with respect to all of the Covered Shares (or, if applicable, only such portion of the Covered Shares as is provided in Section 3.1(b) of the Stockholder Agreement) (including, without limitation, the power to execute and deliver written consents) at every annual or special meeting of stockholders of the Company (and at every adjournment or postponement thereof), and in every written consent in lieu of such meeting:

(a) in favor of the adoption of the Merger Agreement and any related proposal in furtherance thereof, as reasonably requested by Parent, submitted for the vote or written consent of stockholders;

Any obligation of the Stockholder hereunder shall be binding upon the successors and assigns of the Stockholder.

This Proxy shall terminate, and be of no further force and effect, automatically upon the Expiration Time.

[signature page follows]

COUNTERPART SIGNATURE PAGE

IN WITNESS WHEREOF, the Stockholder has caused this Irrevocable Proxy to be duly executed as of the day and year first above written.

NEW MOUNTAIN PARTNERS, L.P.

By: New Mountain Investments, L.P.,

its general partner

By: New Mountain GP, LLC,

its general partner

By: /s/ Steven B. Klinsky

Name: Steven B. Klinsky

Title: Chief Executive Officer

NUMBER OF OUTSTANDING SHARES OF COMPANY STOCK

BENEFICIALLY OWNED BY THE STOCKHOLDER:

SERIES A 7% CONVERTIBLE PREFERRED STOCK 6,790,797

COMMON STOCK 6,790,797 (upon conversion)

Stockholder Address:	with a copy to:
New Mountain Partners, L.P. 787 Seventh Avenue, 49th Floor New York, NY 10019 Attention: Mr. Michael B. Ajouz Fax: (212) 582-2277	Fried, Frank, Harris, Shriver & Jacobson LLP One New York Plaza New York, NY 10004 Attention: Aviva F. Diamant, Esq. Fax: (212) 859-4000

EX-99.9 4 ad99_9.htm STOCKHOLDER AGREEMENT ad99_9.htm

Exhibit 99.9

STOCKHOLDER AGREEMENT

BY AND AMONG

SXC HEALTH SOLUTIONS CORP.,

NEW MOUNTAIN AFFILIATED INVESTORS, L.P.,

AND

NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.

DATED AS OF FEBRUARY 25, 2008

INDEX OF DEFINED TERMS


	Page
Agreement		1
Beneficial Ownership		2
Beneficially Own		2
Beneficially Owned		2
Claims		11
Company		1
Company Common Stock		1
Company Convertible Preferred Stock		1
Company Stock		1
Covered Shares		2
Depositary		3
Encumbrance		2
Existing Shares		2
Fundamental Amendment		12
Grantees		5
Lock-Up Period		8
Merger		1
Merger Agreement		1
Merger Sub		1
Offer		1
Operative Date		2
Other Stockholder		2
Parent		1
Prohibited Activity		11
Registration Rights Agreement		8
Releasees		11
Section 3.1(a) Matters		5
Stockholder		1
Tender Documents		3
Traded Securities		10
Transfer		2
US Corp.		1
Valuation Period		10

STOCKHOLDER AGREEMENT

STOCKHOLDER AGREEMENT, dated as of February 25, 2008 (this “Agreement”), by and among SXC Health Solutions Corp., a corporation organized under the laws of Yukon Territory, Canada (“Parent”), New Mountain Affiliated Investors, L.P., a Delaware limited partnership (the “Stockholder”), and National Medical Health Card Systems, Inc., a Delaware corporation (the “Company”).

WITNESSETH:

WHEREAS, as of the date hereof, the Stockholder is the record and beneficial owner, in the aggregate, of 165,725 outstanding shares of the Company Convertible Preferred Stock;

ARTICLE I

GENERAL

1.1. Defined Terms. The following capitalized terms, as used in this Agreement, shall have the meanings set forth below. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Merger Agreement.

“Existing Shares” means, with respect to the Stockholder, the number of shares of Company Stock Beneficially Owned and owned of record by the Stockholder, as set forth in the recitals.

“Other Stockholder” means New Mountain Partners, L.P., a Delaware limited partnership and the holder of the outstanding shares of Company Convertible Preferred Stock not held by the Stockholder.

ARTICLE II

TENDERING

2.1. Agreement to Tender.

(c) Notwithstanding the provisions of Sections 2.1(a) and 2.1(b), in the event of a Change in Recommendation made in compliance with the Merger Agreement, the obligation of the Stockholder to tender and not withdraw its Covered Shares in the manner set forth in this Section 2.1 shall terminate automatically without any further action by any party, and the Stockholder may or may not tender all or any portion of its Covered Shares in the Offer, and may withdraw from the Offer all or any portion of its Covered Shares that it may previously have tendered, as the Stockholder, in its sole discretion, determines.

ARTICLE III

VOTING

3.1. Agreement to Vote.

(i) appear at each such meeting or otherwise cause the Covered Shares as to which the Stockholder controls the right to vote to be counted as present thereat for purposes of calculating a quorum; and

(ii) vote (or cause to be voted), in person or by proxy, or deliver (or cause to be delivered) a written consent covering, all of the Covered Shares as to which the Stockholder controls the right to vote (i) in favor of the adoption of the Merger Agreement and any related proposal in furtherance thereof, as reasonably requested by Parent, submitted for the vote or written consent of stockholders; (ii) against any action or agreement submitted for the vote or written consent of stockholders that the Stockholder knows is in opposition to, or competitive or materially inconsistent with, the Offer or the Merger or that the Stockholder knows would result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company contained in the Merger Agreement, or of the Stockholder contained in this Agreement; and (iii) against any Acquisition Proposal and against any other action, agreement or transaction submitted for the vote or written consent of stockholders that the Stockholder knows would impede, interfere with, delay, postpone, discourage, frustrate the purposes of or adversely affect the Offer, the Merger or the other transactions contemplated by the Merger Agreement or this Agreement or the performance by the Company of its obligations under the Merger Agreement or by the Stockholder of its obligations under this Agreement, including, but not limited to: (A) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any subsidiary of the Company; (B) any sale, lease or transfer of a material amount of assets of the Company (including capital stock or other equity interest in its Subsidiaries) or any subsidiary of the Company; (C) any reorganization, recapitalization, dissolution or liquidation of the Company or any subsidiary of the Company; (D) any change in a majority of the board of directors of the Company; (E) any amendment to the Company’s certificate of incorporation or bylaws (except for any amendment to increase the authorized capital stock); and (F) any change in the capitalization of the Company or the Company’s corporate structure.

Any such vote shall be cast (or consent shall be given) by the Stockholder in accordance with such procedures relating thereto so as to ensure that it is duly counted, including for purposes of determining whether a quorum is present.

3.3. Proxy. Without in any way limiting the Stockholder’s right to vote the Covered Shares in its sole discretion on any matters other than the Section 3.1(a) Matters that may be submitted to a stockholder vote, consent or other approval, the Stockholder hereby irrevocably appoints as its proxy and attorney-in-fact, Gordon Glenn and Jeffrey Park, pursuant to a proxy to be delivered to Parent substantially in the form attached hereto as Annex A, in their respective capacities as officers of Parent, and any individual who shall hereafter succeed to any such officer of Parent, and any other Person designated in writing by Parent (collectively, the “Grantees”), each of them individually, with full power of substitution, to vote or execute written consents with respect to the Covered Shares as to which the Stockholder controls the right to vote in accordance with Section 3.1 and, in the discretion of the Grantees, with respect to any proposed postponements or adjournments of any annual or special meeting of the stockholders of the Company at which any of the Section 3.1(a) Matters was to be considered. This proxy is coupled with an interest and shall be irrevocable until the earliest of (i) the Operative Date, (ii) a Change in Recommendation, (iii) the termination of the Merger Agreement in accordance with its terms, or (iv) the termination of this Agreement in accordance with its terms, in which event this proxy shall automatically be revoked without any further action by any party. The Stockholder will take such further action or execute such other instruments as may be necessary to effectuate the intent of this proxy and hereby revokes any proxy previously granted by it with respect to the Covered Shares with respect to any of the Section 3.1(a) Matters. So long as the proxy granted under this Section 3.3 is a valid uncontested proxy that is effective to deliver the votes of the Covered Shares, the Stockholder shall be deemed to be fulfilling its obligations under Section 3.1. If Parent believes that such proxy is not a valid proxy or if Parent otherwise

does not wish to utilize the proxy, Parent will so notify the Stockholder in writing so that the Stockholder will be able to perform its obligations under Section 3.1.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

4.1. Representations and Warranties of the Stockholder. The Stockholder hereby represents and warrants to Parent as follows:

breach of any of the terms or conditions of, result in any (or the right to make any) modification of or the cancellation or loss of a benefit under, require any notice, consent or action under, or otherwise give any Person the right to terminate, accelerate obligations under or receive payment or additional rights under, or constitute a default under, any Contract to which the Stockholder is a party or by which it is bound or (iii) violate any Law applicable to the Stockholder or by which any of the Stockholder’s assets or properties is bound, except for any of the foregoing as would not, either individually or in the aggregate, impair the ability of the Stockholder to perform its obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.

ARTICLE V

OTHER COVENANTS

5.1. Prohibition on Transfers, Other Actions.

any other action, that violates or conflicts with the Stockholder’s representations, warranties, covenants and obligations under this Agreement; or (iii) knowingly take any action that could restrict or otherwise affect the Stockholder’s legal power, authority and right to comply with and perform its covenants and obligations under this Agreement. Any Transfer in violation of this provision shall be void.

5.4. No Solicitation.

“proxies” (as such terms are used in the rules of the SEC) or powers of attorney or similar rights to vote, or seek to advise or influence any Person with respect to the voting of, any shares of Company Stock in connection with any vote or other action on any of the Section 3.1(a) Matters, other than to recommend that stockholders of the Company vote in favor of the adoption of the Merger Agreement and as otherwise expressly provided in this Agreement or to otherwise vote or consent with respect to Covered Shares in a manner that would not violate Section 3.1, (iv) vote, approve, adopt or recommend, or publicly propose to approve, adopt or recommend, any letter of intent, memorandum of understanding, agreement, option agreement or other agreement relating to an Acquisition Proposal or any proposal, offer or inquiry that may reasonably be expected to lead to an Acquisition Proposal, or (v) agree to do any of the foregoing. The Stockholder hereby agrees immediately to cease and cause to be terminated all existing solicitations, discussions or negotiations with any Person with respect to any Acquisition Proposal or any offer, proposal or inquiry that may reasonably be expected to lead to an Acquisition Proposal, and will inform its Affiliates and Representatives of the obligations undertaken by the Stockholder pursuant to this Agreement, including this Section 5.4(a). If any of the Stockholder’s Affiliates or Representatives takes any action that the Stockholder is not permitted to take under this Section 5.4, it shall be deemed to be a breach of this Section 5.4 by the Stockholder. Notwithstanding anything in this Agreement (including the immediately preceding sentence) to the contrary, no action taken by the Company or any of its Affiliates or Representatives in compliance with Section 6.2 of the Merger Agreement shall be a violation by the Stockholder of this Section 5.4(a).

sought from or initiated with the Stockholder, and shall disclose the material terms of such Acquisition Proposal, proposal, offer or inquiry, including the identity of the Person or Persons making such Acquisition Proposal, proposal, offer or inquiry (unless prohibited by the confidentiality agreement with such Person) and provide a copy thereof if in writing and any related available material documentation or correspondence. The Stockholder will keep Parent informed on a prompt basis of the status and any material discussions or negotiations (including material amendments and proposed material amendments) relating to any Acquisition Proposal or any such offer, proposal or inquiry.

5.6. Stockholder Profit.

third investment banking firm, which third firm shall make such determination; provided, further, that the fees and expenses of such investment banking firm shall be borne equally by Parent and the Stockholder. The determination of the investment-banking firm shall be binding upon the parties.

5.7. Release. From and after the Effective Time, the Stockholder finally and forever releases Parent and the Company, and their respective successors, assigns, officers, directors, employees and all affiliates and Subsidiaries, past and present, of Parent and the Company (the “Releasees”) from each and every agreement, commitment, indebtedness, obligation and claim of every nature and kind whatsoever, known or unknown, suspected or unsuspected (each, a “Claim” and collectively, the “Claims”) that (A) the Stockholder may have had in the past, may have as of the date hereof or, to the extent arising from or in connection with any act, omission or state of facts taken or existing on or prior to the date hereof, may have after the date hereof against any of the Releasees and (B) has arisen or arises directly out of the Stockholder’s interest as a stockholder of the Company or any of its Subsidiaries; except with respect to any such Claims arising under this Agreement, the Merger Agreement, the Registration Rights Agreement and the transactions contemplated hereby and thereby, and any Claim by the Stockholder for failure by the Company to pay all accrued and unpaid dividends on the Company Convertible Preferred Stock prior to the Operative Date.

5.9. Further Assurances. From time to time, at Parent’s request and without further consideration, the Stockholder shall execute and deliver such additional documents and take all

such further action as may be reasonably necessary to effect the actions and consummate the transactions contemplated by this Agreement.

5.11. Meeting Rights. During the Lock-Up Period, the Stockholder shall be entitled to attend any meeting held pursuant to the Other Stockholder’s exercise of its right to meet each calendar quarter with the Chief Executive Officer and the Chief Financial Officer of Parent.

5.13. Affiliate Agreements. The Stockholder shall take all actions necessary to cause the Registration Rights Agreement, dated as of March 19, 2004, by and among the Company, the Stockholder, the Other Stockholder, and such other persons who became signatories thereto as provided therein to be terminated (without any payment), effective as of and contingent upon the earlier to occur of the Acceptance Date and the Effective Time, such that such agreement shall be of no further force or effect immediately thereafter. The Stockholder has approved the Certificate of Amendment. The Stockholder hereby waives its right of first offer under the Amended and Restated Preferred Stock Purchase Agreement, dated as of November 26, 2003, by and between the Company and the Stockholder, in connection with the Merger Agreement and the transactions contemplated thereby.

ARTICLE VI

MISCELLANEOUS

the execution by the Company, Parent, US Corp. and Merger Sub of an amendment to, or waiver by the Company, Parent, US Corp. or Merger Sub of any provision of, the Offer or the Merger Agreement that reduces the amount of the Offer Price or the Merger Consideration, changes the form of the Offer Price or the Merger Consideration to include or substitute therefor a form other than cash and Parent Common Stock, or decreases the ratio of cash to Parent Common Stock included in the Offer Price or the Merger Consideration. If the Stockholder does not exercise the termination right described above within five business days following the date the Stockholder is notified that such Fundamental Amendment is effected, then this Agreement shall give effect to any modified terms incorporated from the Merger Agreement and, except as so modified, shall continue in full force and effect.

6.2. Legends; Stop Transfer Order.

(b) Each certificate representing Covered Shares held of record by the Stockholder shall bear the following legend on the face thereof:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON VOTING, TRANSFER AND CERTAIN OTHER LIMITATIONS SET FORTH IN THAT CERTAIN STOCKHOLDER AGREEMENT DATED AS OF FEBRUARY 25, 2008, AMONG SXC HEALTH SOLUTIONS CORP., NEW MOUNTAIN AFFILIATED INVESTORS, L.P. AND NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC., AS THE SAME MAY BE AMENDED FROM TIME TO TIME, COPIES OF WHICH STOCKHOLDER AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.”

6.4. Notices.

(i) if to Parent, to:

SXC Health Solutions Corp.
2441 Warrenville Road, Suite 610
Lisle, IL 60532-3246
Fax: (630) 328-2190
Attention: Chief Financial Officer

with a copy to:

Sidley Austin LLP
1 South Dearborn Street
Chicago, IL 60603
Fax: (312) 853-7036
Attention: Gary D. Gerstman
Scott R. Williams

(ii) if to the Company, to:

National Medical Health Card Systems, Inc.
26 Harbor Park Drive
Port Washington, NY 11050
Fax: (516) 605-6989
Attention: George McGinn, Esq.

with a copy to:

Bass, Berry & Sims PLC
315 Deaderick Street, Suite 2700
Nashville, TN 37238

Fax: (615) 742-6293
Attention: J. Allen Overby, Esq.
Jennifer H. Noonan, Esq.

(iii) if to the Stockholder, to:

New Mountain Affiliated Investors, L.P.
787 Seventh Avenue, 49th Floor
New York, NY 10019
Fax: (212) 582-2277
Attention: Mr. Michael B. Ajouz

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, NY 10004
Fax: (212) 859-4000
Attention: Aviva F. Diamant, Esq.

6.5. Interpretation. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section references are to this Agreement unless otherwise specified. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. This Agreement is the product of negotiation by the parties having the assistance of counsel and other advisers. It is the intention of the parties that this Agreement not be construed more strictly with regard to one party than with regard to the others.

embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written and oral, that may have related to the subject matter hereof in any way.

6.9. Amendment; Waiver; Expenses.

(b) The Stockholder agrees that it is solely responsible (without reimbursement from the Company) for all costs and expenses (including all fees and expenses of

counsel) incurred by the Stockholder in connection with this Agreement and the Registration Rights Agreement.

[Remainder of this page intentionally left blank]


		SXC HEALTH SOLUTIONS CORP.

		By: Name:		/s/ Jeffrey Park Jeffrey Park
		Title:		Chief Financial Officer

		NEW MOUNTAIN AFFILIATED INVESTORS, L.P.

		By:		New Mountain GP, LLC, its general partner

		By:		/s/ Steven B. Klinsky

		Name:		Steven B. Klinsky
		Title:		Chief Executive Officer

		NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.

		By:		/s/ George McGinn

		Name:		George McGinn
		Title:		General Counsel and Secretary

ANNEX A

IRREVOCABLE PROXY

Dated as of February 25, 2008

This Proxy is irrevocable (to the fullest extent permitted by law), is coupled with an interest and is granted pursuant to that certain Stockholder Agreement of even date herewith (the “Stockholder Agreement”) by and among SXC Health Solutions Corp., a corporation organized under the laws of Yukon Territory, Canada (“Parent”), the Company and the undersigned Stockholder of the Company, and is granted in consideration of Parent entering into that certain Agreement and Plan of Merger of even date herewith (as it may hereafter be amended from time to time in accordance with the provisions thereof, the “Merger Agreement”) by and among Parent, SXC Health Solutions, Inc., a Texas corporation (“US Corp.”), Comet Merger Corporation, a newly-formed Delaware corporation that is wholly-owned by US Corp. and an indirect wholly-owned subsidiary of Parent (“Merger Sub”), and the Company. The Merger Agreement provides that Merger Sub will commence an exchange offer (the “Offer”) to acquire all of the outstanding shares of common stock, par value $0.001 per share, of the Company (“Company Common Stock”), and following the consummation of the Offer (or, subject to certain conditions, in lieu thereof), Merger Sub will merge with and into the Company (the “Merger”) and the Stockholder will be entitled to receive the merger consideration specified therein. The term “Expiration Time”, as used in this Proxy, shall mean the earliest to occur of (i) the Operative Date, (ii) a Change in Recommendation, (iii) the termination of the Merger Agreement in accordance with its terms, and (iv) the termination of the Stockholder Agreement in accordance with its terms.

The attorneys and proxies named above, and each of them, are hereby authorized and empowered by the Stockholder, at any time prior to the Expiration Time, to act as the Stockholder’s attorney and proxy to vote all of the Covered Shares, and to exercise all voting, consent and similar rights of the undersigned with respect to all of the Covered Shares

(including, without limitation, the power to execute and deliver written consents) at every annual or special meeting of stockholders of the Company (and at every adjournment or postponement thereof), and in every written consent in lieu of such meeting:

(a) in favor of the adoption of the Merger Agreement and any related proposal in furtherance thereof, as reasonably requested by Parent, submitted for the vote or written consent of stockholders;

Any obligation of the Stockholder hereunder shall be binding upon the successors and assigns of the Stockholder.

This Proxy shall terminate, and be of no further force and effect, automatically upon the Expiration Time.

[signature page follows]

COUNTERPART SIGNATURE PAGE

IN WITNESS WHEREOF, the Stockholder has caused this Irrevocable Proxy to be duly executed as of the day and year first above written.


		NEW MOUNTAIN AFFILIATED INVESTORS, L.P.

		By:		New Mountain GP, LLC, its general partner

		By:
		Name:		Steven B. Klinsky
		Title:		Chief Executive Officer

NUMBER OF OUTSTANDING SHARES OF COMPANY STOCK BENEFICIALLY OWNED BY THE STOCKHOLDER:


SERIES A 7% CONVERTIBLE PREFERRED STOCK		165,725

COMMON STOCK		165,725 (upon conversion)

Stockholder Address:

New Mountain Affiliated Investors, L.P.
787 Seventh Avenue, 49th Floor
New York, NY 10019
Attention: Mr. Michael B. Ajouz
Fax: (212) 582-2277

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, NY 10004
Attention: Aviva F. Diamant, Esq.
Fax: (212) 859-4000

EX-99.10 5 ad99_10.htm PROXY ad99_10.htm

Exhibit 99.10

IRREVOCABLE PROXY

Dated as of February 25, 2008

This Proxy is irrevocable (to the fullest extent permitted by law), is coupled with an interest and is granted pursuant to that certain Stockholder Agreement of even date herewith (the “Stockholder Agreement”) by and among SXC Health Solutions Corp., a corporation organized under the laws of Yukon Territory, Canada (“Parent”), the Company and the undersigned Stockholder of the Company, and is granted in consideration of Parent entering into that certain Agreement and Plan of Merger of even date herewith (as it may hereafter be amended from time to time in accordance with the provisions thereof, the “Merger Agreement”) by and among Parent, SXC Health Solutions, Inc., a Texas corporation (“US Corp.”), Comet Merger Corporation, a newly-formed Delaware corporation that is wholly-owned by US Corp. and an indirect wholly-owned subsidiary of Parent (“Merger Sub”), and the Company. The Merger Agreement provides that Merger Sub will commence an exchange offer (the “Offer”) to acquire all of the outstanding shares of common stock, par value $0.001 per share, of the Company (“Company Common Stock”), and following the consummation of the Offer (or, subject to certain conditions, in lieu thereof), Merger Sub will merge with and into the Company (the “Merger”) and the Stockholder will be entitled to receive the merger consideration specified therein. The term “Expiration Time”, as used in this Proxy, shall mean the earliest to occur of (i) the Operative Date, (ii) a Change in Recommendation, (iii) the termination of the Merger Agreement in accordance with its terms, and (iv) the termination of the Stockholder Agreement in accordance with its terms.

The attorneys and proxies named above, and each of them, are hereby authorized and empowered by the Stockholder, at any time prior to the Expiration Time, to act as the Stockholder’s attorney and proxy to vote all of the Covered Shares, and to exercise all voting, consent and similar rights of the undersigned with respect to all of the Covered Shares (including, without limitation, the power to execute and deliver written consents) at every annual or special meeting of stockholders of the Company (and at every adjournment or postponement thereof), and in every written consent in lieu of such meeting:

(a) in favor of the adoption of the Merger Agreement and any related proposal in furtherance thereof, as reasonably requested by Parent, submitted for the vote or written consent of stockholders;

Any obligation of the Stockholder hereunder shall be binding upon the successors and assigns of the Stockholder.

This Proxy shall terminate, and be of no further force and effect, automatically upon the Expiration Time.

[signature page follows]

COUNTERPART SIGNATURE PAGE

IN WITNESS WHEREOF, the Stockholder has caused this Irrevocable Proxy to be duly executed as of the day and year first above written.

NEW MOUNTAIN AFFILIATED

INVESTORS, L.P.

By: New Mountain GP, LLC,

its general partner

By: /s/ Steven B. Klinsky

Name: Steven B. Klinsky

Title: Chief Executive Officer

NUMBER OF OUTSTANDING SHARES OF COMPANY STOCK

BENEFICIALLY OWNED BY THE STOCKHOLDER:

SERIES A 7% CONVERTIBLE PREFERRED STOCK 165,725

COMMON STOCK 165,725 (upon conversion)

Stockholder Address:	with a copy to:
New Mountain Affiliated Investors, L.P. 787 Seventh Avenue, 49th Floor New York, NY 10019 Attention: Mr. Michael B. Ajouz Fax: (212) 582-2277	Fried, Frank, Harris, Shriver & Jacobson LLP One New York Plaza New York, NY 10004 Attention: Aviva F. Diamant, Esq. Fax: (212) 859-4000

EX-99.11 6 ad99_11.htm REGISTRATION RIGHTS AGREEMENT ad99_11.htm

Exhibit 99.11

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of February 25, 2008 by and between SXC Health Solutions Corp., a corporation organized under the laws of Yukon Territory, Canada (“Parent”), New Mountain Partners, L.P., a Delaware limited partnership (“New Mountain Partners”), and New Mountain Affiliated Investors, L.P., a Delaware limited partnership (together with New Mountain Partners, the “Stockholders”).

RECITALS

WHEREAS, Parent, SXC Health Solutions, Inc., a Texas corporation and a wholly-owned subsidiary of Parent (“U.S. Corp.”), Comet Merger Corporation, a newly-formed Delaware corporation wholly-owned by U.S. Corp. and an indirect wholly-owned subsidiary of Parent (“Merger Sub”), and National Medical Health Card Systems, Inc., a Delaware corporation (the “Company”), are entering into an Agreement and Plan of Merger, dated as of February 25, 2008 (as amended, supplemented, restated or otherwise modified from time to time, the “Merger Agreement”; capitalized terms used but not defined herein shall have the meanings set forth in the Merger Agreement) pursuant to which, among other things, Merger Sub will commence an exchange offer (the “Offer”) to acquire all of the outstanding shares of common stock, par value $0.001 per share, of the Company (“Company Common Stock”), and following the consummation of the Offer (or, subject to the certain conditions, in lieu thereof, Merger Sub will merge with and into the Company (the “Merger”) and each outstanding share of Company Common Stock and each outstanding share, if any, of the Company’s Series A 7% Convertible Preferred Stock, par value $0.10 per share (“Company Convertible Preferred Stock”, and together with the Company Common Stock, “Company Stock”), will be converted into the right to receive the merger consideration specified in the Merger Agreement;

WHEREAS, as of the date of the Merger Agreement, the Stockholders are the record and beneficial owners, in the aggregate, of 6,956,522 outstanding shares of the Company Convertible Preferred Stock;

WHEREAS, pursuant to the Merger Agreement (and subject to the terms and conditions thereof), upon consummation of the Offer or the Merger, as the case may be, the Stockholders will receive shares of common stock of Parent (the “Parent Common Stock”);

WHEREAS, concurrently with the execution of the Merger Agreement and as a condition to the willingness of Parent to enter into the Merger Agreement, the Stockholders are entering into Stockholder Agreements (the “Stockholder Agreements”); and

WHEREAS, in consideration of the Stockholders’ willingness to enter into the Stockholder Agreements, Parent and the Stockholders agreed to enter into this Agreement;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Definitions. Unless otherwise provided in this Agreement, capitalized terms used herein shall have the following meanings:

“Agreement” has the meaning set forth in the preamble to this Agreement.

“Commission” means the Securities and Exchange Commission.

“Company” has the meaning set forth in the Recitals.

“Company Common Stock” has the meaning set forth in the Recitals.

“Company Convertible Preferred Stock” has the meaning set forth in the Recitals.

“Company Stock” has the meaning set forth in the Recitals.

“Demand Registration” has the meaning set forth in Section 2.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Merger” has the meaning set forth in the Recitals.

“Merger Agreement” has the meaning set forth in the Recitals.

“Merger Sub” has the meaning set forth in the Recitals.

“Offer” has the meaning set forth in the Recitals.

“Parent” has the meaning set forth in the preamble to this Agreement.

“Parent Common Stock” has the meaning set forth in the Recitals.

“Person” means any individual, corporation, association, limited liability company, partnership, trust or estate, unincorporated organization, joint venture, a government or any agency or political subdivision thereof, or any other entity of whatever nature.

“Piggyback Registration” has the meaning set forth in Section 3.1.

“Qualified Holders” means the holders of a majority of the Registrable Securities then outstanding.

“Registrable Securities” means (a) the Shares and (b) any shares of Parent Common Stock issued or issuable with respect to any of the Shares by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) they have been distributed to the public pursuant to an offering registered under the Securities Act or (ii) they have been sold to the public through a broker, dealer or market maker in compliance with Rule 144 under the Securities Act (or any similar rule then in force).

“Securities Act” means the Securities Act of 1933, as amended.

“Shares” means the shares of Parent Common Stock to be issued to the Stockholders pursuant to the Offer or the Merger, as the case may be, in accordance with the Merger Agreement.

“Stockholders” has the meaning set forth in the preamble to this Agreement.

“Stockholder Agreements” has the meaning set forth in the Recitals.

“Suspension Period” has the meaning set forth in Section 5.2.

“Trigger Event” means the one-time occurrence of either of the following: (i) the average daily trading volume of Parent Common Stock, in any 10 consecutive trading days occurring at any time from and after the first anniversary of the Operative Date (as defined in the Stockholder Agreement) and prior to the 18-month anniversary of the Operative Date, being less than 100,000 shares in the aggregate on the Toronto Stock Exchange and all exchanges in the United States on which Parent Common Stock is then traded, or (ii) the average daily trading volume of Parent Common Stock, in any 20 trading days in any three-month period occurring at any time from and after the nine-month anniversary of the Operative Date and prior to the 18-month anniversary of the Operative Date, being less than 100,000 shares in the aggregate on all such exchanges.

“U.S. Corp” has the meaning set forth in the Recitals.

“Violation” has the meaning set forth in Section 7.1.

2. Demand Registration.

2.1 Request for Registration. At any time after the first anniversary of the date of this Agreement, if a Trigger Event has occurred, for a period that is 180 days following the later of (i) the first anniversary of the Operative Date and (ii) the occurrence of such Trigger Event, the Qualified Holders may, subject to Sections 2.2 and 2.4, request registration under the Securities Act of the Registrable Securities (a “Demand Registration”). The request for a Demand Registration shall specify the number of Registrable Securities requested to be registered and the intended method of distribution; provided, however, that Parent shall not be obligated to effect a Demand Registration unless the Qualified Holders request that Parent register Registrable Securities representing in the aggregate at least 5% of the outstanding Parent Common Stock. Within ten days after receipt of any such request, Parent shall give written notice of such requested registration to all other holders of Registrable Securities and, subject to Section 2.3, shall include as part of such Demand Registration all Registrable Securities with respect to which Parent has received written requests for inclusion therein within 15 days after the receipt of Parent’s notice by such holders.

2.2 Limitations on Demand Registration. A registration requested pursuant to this Agreement shall be deemed to have been effected for purposes of Section 2.1 if (i) it has been declared effective by the Commission and (ii) at least 75% of the Registrable Securities requested to be included in such registration shall have been registered and sold.

2.3 Priority on Demand Registration. If a Demand Registration is an underwritten offering and the managing underwriters advise Parent in writing, with a copy to be delivered to the Qualified Holders, that, in their opinion, the number of Registrable Securities requested to be included in such offering, and other securities requested to be included in such offering, exceeds the largest number of securities which can be sold therein without adversely affecting the marketability of the offering and within a price range reasonably acceptable to the holders of a majority of the Registrable Securities requested to be registered, Parent shall first include in such registration, prior to the inclusion of any securities which are not Registrable Securities, the Registrable Securities requested to be included which in the opinion of such underwriters can be sold without adversely affecting the marketability of the offering, prorata among the respective holders thereof on the basis of the amount of Registrable Securities owned by each such requesting holder.

2.4 Restrictions on Registration. Parent may postpone or suspend, as applicable, for no more than one period of up to 90 days in any 12-month period the filing, effectiveness or use of a registration statement for a Demand Registration (and the holders of Registrable Securities participating in such offering hereby agree not to offer or sell any Registrable Securities pursuant to such registration statement during such postponement or suspension), pursuant to this Section 2.4 or clause (iii) of Section 5.2, if Parent determines in good faith that such filing or effectiveness might (a) interfere with or adversely affect the negotiation or completion of any material transaction or other material event that is being contemplated by Parent or (b) involve initial or continuing disclosure obligations relating to a material event or material state of facts regarding Parent the disclosure of which would, in the reasonable judgment of Parent, be adverse to its interests; provided, that, in the event of such a postponement or suspension of registration, the holders of Registrable Securities initially requesting such Demand Registration shall be entitled to withdraw such request and, if such request is withdrawn, such Demand Registration shall not count as the Demand Registration hereunder. In the event Parent shall exercise its postponement or suspension rights hereunder, (x) the applicable time period during which a registration statement is to remain effective under Section 5.2 and the 180-day period specified in Section 2.1 shall be extended by a period of time equal to the duration of such postponement or suspension. The number and length of suspension and postponement periods in any 12-month period under this Section 2.4 shall be aggregated with the number and the length of Suspension Periods under clause (iii) of Section 5.2, such that Parent shall not be permitted to postpone or suspend, for more than 90 days in such 12-month period the filing, effectiveness or use of a registration statement for a Demand Registration pursuant to Section 2.4 and/or clause (iii) of Section 5.2 taken together.

2.5 Selection of Underwriters. In the event that any public offering pursuant to a Demand Registration shall involve, in whole or in part, an underwritten offering, Parent shall have the right to designate a nationally recognized underwriter or underwriters as the lead or managing underwriter(s) of such underwritten offering who shall be reasonably acceptable to the holders of a majority of the Registrable Securities proposed to be sold in such underwritten offering. The Stockholders and Parent agree that if the Stockholders’ Registrable Securities, or any portion thereof, are sold in any public offering involving, in whole or in part, an underwritten offering, then the Stockholders and Parent will enter into a customary underwriting agreement with the underwriter(s) selected pursuant to the preceding sentence.

3. Piggyback Registration.

3.1 Right to Piggyback. If on or after the first anniversary of the Operative Date and prior to the 18 month anniversary of the Operative Date, Parent proposes to register Parent Common Stock (for its own account or for the account of any other holder of its securities) under the Securities Act (other than pursuant to a Demand Registration which shall be governed by Section 2, and registrations on Form S-4 (or F-4) or Form S-8 or on any successor or other form promulgated for similar purposes or relating to a Rule 145 transaction) and the registration form to be used may be used for the registration of Registrable Securities for sale to the public under the Securities Act (a “Piggyback Registration”), the Company shall give prompt written notice to all holders of Registrable Securities of its intention to effect such a registration and, subject to the terms hereof, shall use commercially reasonable efforts to include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein (which request shall specify the number of Registrable Securities intended to be disposed of by such Holder) within 21 days after such holders receive the Company’s notice; provided, that (i) if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to proceed with the proposed registration, the Company may, at its election, give written notice of such determination to each holder of Registrable Securities and thereupon shall be relieved of its obligation to register any Registrable Securities in connection with such registration and (ii) if such registration involves an underwritten offering by the Company, all holders requesting to be included in the Company’s registration must sell their Registrable Securities to such underwriters who shall have been selected by the Company on the same terms and conditions as apply to the Company, with such differences, including any with respect to indemnification and contribution, as may be customary or appropriate in combined primary and secondary offerings.

3.2 Priority on Primary Registrations. If a Piggyback Registration is an underwritten primary offering on behalf of the Company, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such offering exceeds the largest number of securities which can be sold therein without adversely affecting the marketability of the offering and within a price range reasonably acceptable to the Company, the Company shall include in such registration (a) first, the securities the Company proposes to sell, (b) second, the Registrable Securities requested to be included in such registration, prorata among the respective holders thereof on the basis of the amount of Registrable Securities owned by each such holder and (c) third, other securities requested to be included in such registration.

3.3 Selection of Underwriters. The Company shall have the right to select the investment banker(s) and/or manager(s) to administer the offering in connection with any Piggyback Registration.

3.4 Other Agreements. Each holder of Registrable Securities agrees that, if they participate in the Piggyback Registration, they will execute such other customary agreements as the Company may reasonably request to further accomplish the purposes of this Section 3.

4. Holdback Agreements. Upon the written request of the underwriters managing an underwritten registered public offering of Parent Common Stock pursuant to a Demand Registration or a Piggyback Registration in which Registrable Securities are included, the holders of Registrable Securities shall not effect any public sale or distribution (including sales pursuant to Rule 144) of equity securities of Parent, or any securities convertible into or exchangeable or exercisable for such securities, during the 7 days prior to, and during the 90-day period beginning on, the effective date of such Demand Registration or Piggyback Registration (or such shorter period as may be required for officers and directors of Parent).

5. Registration Procedures. Whenever the holders of Registrable Securities have properly requested that any Registrable Securities be registered pursuant to this Agreement, Parent shall use commercially reasonable efforts to effect the registration under the Securities Act of the sale of such Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto Parent shall as expeditiously as possible:

5.1 prepare and file with the Commission a registration statement and such amendments and supplements as may be necessary with respect to such Registrable Securities and, subject to the postponement and suspension provisions of Sections 2.4 and 5.2, use its commercially reasonable efforts to cause such registration statement to become effective;

5.2 notify each holder of Registrable Securities of the effectiveness of the registration statement filed hereunder and prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than 30 days (or until the distribution described in the registration statement has been completed or such lesser period of time as Parent or any seller may be required under the Securities Act to deliver a prospectus in connection with any sale of Registrable Securities and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers set forth in such registration statement); provided, however, that at any time, upon written notice to the participating holders of Registrable Securities, Parent may suspend the use or effectiveness of any registration statement (and the holders of Registrable Securities participating in such offering hereby agree not to offer or sell any Registrable Securities pursuant to such registration statement during the Suspension Period) upon and continuing until the discontinuation of (i) the issuance by the Commission of a stop order with respect to such registration statement or the initiation of proceedings with respect to such registration statement under Section 8(d) or 8(e) of the Securities Act, (ii) the occurrence of any event or the existence of any fact as a result of which (A) any registration statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading or (B) any prospectus included in any such registration statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iii) the occurrence or existence of any pending corporate development, including without limitation any such development that may (y) interfere with or adversely affect the negotiation or completion of any material transaction or other material event that is being contemplated by Parent or (z) involve initial or continuing disclosure obligations relating to a material event or

material state of facts regarding Parent the disclosure of which would, in the reasonable judgment of Parent, be adverse to its interests, that, in the reasonable discretion of Parent, makes it appropriate to suspend the availability of any registration statement and the related prospectus (each of (i), (ii) and (iii) above is hereinafter referred to as a “Suspension Period”); provided that Parent’s right to suspend under clause (iii) above shall be subject to the restrictions on the length of any suspensions or postponements in any 12-month period set forth in Section 2.4 and shall be aggregated with the length of suspension and postpone periods under Section 2.4, such that Parent shall not be permitted to postpone or suspend, for more than 90 days in any 12-month period the filing, effectiveness or use of a registration statement for a Demand Registration pursuant to Section 2.4 and/or clause (iii) of this Section 5.2 taken together. In the event that Parent shall exercise its rights hereunder, the applicable time period during which the registration statement is to remain effective shall be extended by a period of time equal to the duration of the Suspension Period;

5.3 furnish to each seller of Registrable Securities such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller;

5.4 use commercially reasonable efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as may be reasonably requested by any such seller and do any and all other reasonable acts and things which may be necessary or reasonably advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided, however, that Parent shall not be required to (a) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subsection, (b) subject itself to taxation in any such jurisdiction or (c) consent to general service of process in any such jurisdiction);

5.5 promptly notify each seller of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and, at the request of any such seller, Parent shall promptly prepare a reasonable number of copies of a supplement or amendment to such prospectus so that, as thereafter delivered to the sellers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, in which event the periods mentioned in Section 5.2 shall be extended by the length of the period from and including the date when each seller of such Registrable Securities shall have received such notice to the date on which each such seller has received the copies of the supplemented or amended prospectus contemplated under this Section 5.5;

5.6 use commercially reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange and/or quotation system on which Parent Common Stock is then listed and/or quoted;

5.7 provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement;

5.8 in the case of an underwritten offering, enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities, except to the extent any such agreement or other action would materially interfere with the conduct of Parent’s business;

5.9 in the case of an underwritten offering, make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement, and any attorney, accountant or other agent retained by any such seller or underwriter, at the offices where normally kept, during normal business hours, all pertinent financial and other records, pertinent corporate documents and properties of Parent, and cause Parent’s officers, employees and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement, in each case as is necessary or reasonably advisable (based on the reasonable advice of their respective counsel) to enable such seller or underwriter to exercise their due diligence responsibilities and defenses under the Securities Act; provided, however, that (i) such sellers shall have entered into a customary confidentiality agreement reasonably acceptable to Parent and (ii) such sellers shall use their reasonable best efforts to minimize the disruption to Parent’s business and coordinate any such investigation of the books, records and properties of Parent and any discussions with Parent’s officers and accountants so that all such investigations occur at the same time;

5.10 otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months beginning with the first day of Parent’s first full calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

5.11 in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Company Common Stock included in such registration statement for sale in any jurisdiction, Parent shall use its commercially reasonable efforts promptly to obtain the withdrawal of such order;

5.12 use its commercially reasonable efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition of such Registrable Securities; and

5.13 take such other actions reasonably requested by the sellers of Registrable Securities as are necessary or reasonably advisable in order to facilitate and/or expedite the registration and disposition of any Registrable Securities pursuant to the terms of this Agreement.

6. Registration Expenses. All expenses incident to Parent’s performance of or compliance with this Agreement, including, without limitation, all registration and filing fees (including the fees of the Financial Industry Regulatory Authority and the Commission’s registration fees), fees of any transfer agent and registrar, fees and expenses of compliance with securities or blue sky laws, printing expenses, reasonable “road show” or other marketing expenses, fees and disbursements of counsel for Parent, reasonable fees and disbursements of one counsel chosen by the holders of a majority of the Registrable Securities included in such registration up to a maximum of $50,000 if Parent does not trigger a Suspension Period and $75,000 if Parent does trigger a Suspension Period, fees and expenses of Parent’s independent certified public accountants (including the fees and expenses of any comfort letters required by or incident to the performance and compliance with this Agreement), fees and expenses of underwriters (excluding discounts and commissions attributable to the Registrable Securities included in such registration), Parent’s internal expenses and the expenses and fees for listing the securities to be registered on each securities exchange or quotation system on which similar securities issued by Parent are then listed or quoted, shall be borne by Parent; provided, however, that the sellers of Registrable Securities shall bear their own underwriting discounts or commissions, selling or placement agent or broker fees and commissions, and transfer taxes, if any, in connection with the sales of securities by such sellers.

7. Indemnification.

7.1 In connection with any Demand Registration or Piggyback Registration, Parent agrees to indemnify, to the extent permitted by law, each holder of Registrable Securities to be offered in such registration, the partners or officers, directors and equity holders of such holder, and each Person who controls such holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities (joint or several) and expenses (including legal or other expenses reasonably incurred by any of them in connection with investigating or defending any such loss, claim, damage or liability) incurred by such party arising out of, based upon or caused by any of the following statements, omissions or violations (each, a “Violation”): (i) any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus incident to such registration or any amendment thereof, supplement thereto or free writing prospectus, (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or (iii) any violation or alleged violation by Parent of the Securities Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under the Securities Act, Exchange Act or any state securities laws incident to such registration; provided, however, that Parent shall not be liable in any such case for any such loss, claim, damage, liability or action to the extent that it is caused (x) by a Violation that occurs in reliance upon and in conformity with any information furnished in writing to Parent by such holder, and stated to be specifically for use in such registration or (y) by a seller’s failure to deliver a copy of the relevant current prospectus or any amendments or

supplements thereto or any free writing prospectus after Parent has furnished that seller or any underwriter with copies of the same in advance of the time of first sale.

7.2 In connection with any Demand Registration or Piggyback Registration in which a holder of Registrable Securities is participating, each such holder agrees to indemnify, to the extent permitted by law, Parent, its directors, officers, employees, affiliates, any other holder selling securities in such Demand Registration or Piggyback Registration, and each Person who controls Parent (within the meaning of the Securities Act) against all losses, claims, damages, liabilities (joint or several) and expenses (including legal or other expenses reasonably incurred by any of them in connection with investigating or defending any such loss, claim, damage or liability) arising out of, based upon or caused by any Violation, to the extent that such Violation is caused by any information furnished in writing by such holder, and stated to be specifically for use in such registration; provided, that, the obligation to indemnify shall be individual, not joint and several, for each holder.

7.3 Any Person entitled to indemnification hereunder shall (a) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any Person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party’s ability to defend such claim), and (b) unless in the reasonable judgment (with advice of counsel) of any indemnified party a conflict of interest between such indemnified and indemnifying parties exists with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall be obligated to pay the fees and expenses of one counsel (but not more than one) for all parties indemnified by such indemnifying party with respect to such claim.

7.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any partner, officer, director or controlling Person of such indemnified party and shall survive the transfer of securities.

7.5 If the indemnification provided for under this Agreement is unavailable to an indemnified party hereunder in respect of any losses, liabilities, claims, damages and expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the Violation which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any Violation has been committed by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such Violation. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any

legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. If the allocation provided in this paragraph is not permitted by applicable law, the parties shall contribute based upon the relevant benefits received by Parent from the offering of its securities on the one hand and the net proceeds received by the holders of Registrable Securities from the sale of such Registrable Securities on the other.

7.6 The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined solely by pro rata allocation or any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

7.7 Notwithstanding anything in this Section 7 to the contrary, in connection with the Demand Registration or any Piggyback Registration, the indemnity and contribution obligations and liabilities of each holder of Registrable Securities shall be limited to the net amount of the proceeds received by such holder pursuant to such registration.

8. Participation in Underwritten Registration. No Person may participate in any registration hereunder which is underwritten unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements that are customary and approved by Parent and (b) completes and executes all questionnaires, powers of attorney and other documents reasonably required under the terms of such underwriting arrangements.

9. Information by Sellers. The seller or sellers wishing to sell any Registrable Securities in any registration shall furnish to Parent such information regarding such seller or sellers and the distribution proposed by such seller or sellers as Parent may reasonably request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Agreement.

10. Termination. This Agreement shall terminate and neither party hereto shall have any further obligation to the other party under this Agreement upon the earlier to occur of (a) the time when there shall be no Registrable Securities remaining or (b) the completion of the Demand Registration permitted hereunder; provided, however, that the obligations of the parties under Section 7 hereof shall continue until the expiration of all applicable statutes of limitations.

11. Miscellaneous.

11.1 Merger Agreement. If the Merger Agreement is terminated in accordance with its terms, this Agreement shall immediately terminate concurrently therewith and be of no further force or effect.

11.2 No Inconsistent Agreements. Parent shall not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the holders of Registrable Securities in this Agreement.

11.3 Remedies. Any Person having rights under any provision of this Agreement shall be entitled to enforce such rights specifically, to recover damages caused by

reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. The parties hereto agree and acknowledge that money damages are not an adequate remedy for any breach of the provisions of this Agreement and that any party may apply for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Agreement.

11.4 Amendments and Waivers. Except as otherwise provided herein, the provisions of this Agreement may be amended or waived only upon the prior written consent of (a) Parent and (b) the holders of a majority of the Registrable Securities then outstanding.

11.5 Successors, Assigns and Subsequent Holders. (a) All covenants and agreements in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and the permitted assigns of the parties hereto.

(b) The rights to cause Parent to register Registrable Securities pursuant to this Agreement may be assigned (but only with all related obligations) by a holder of Registrable Securities to a transferee of such securities.

(c) No assignment or transfer pursuant to this Section 11.5 shall be effective unless and until (i) Parent is furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned, and (ii) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement.

11.6 Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter contained herein, and supersedes and preempts all prior agreements, negotiations, discussions and understandings among the parties hereto with respect to such subject matter.

11.7 Severability. Wherever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law and in such a way as to, as closely as possible, achieve the intended economic effect of such provision and this Agreement as a whole, but if any provision contained herein is, for any reason, held to be invalid, illegal or unenforceable in any respect, such provision shall be ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability without invalidating the remainder of such provision or any other provisions hereof, unless such a construction would be unreasonable.

11.8 Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given upon delivery (a) when delivered personally, (b) if transmitted by facsimile when confirmation of transmission is received, (c) if sent by registered or certified mail, postage prepaid, return receipt requested or (d) if sent by reputable overnight courier service (providing proof of delivery); and shall be addressed as follows:

(i) if to Parent, to:

SXC Health Solutions Corp.

2441 Warrenville Road, Suite 610
Lisle, IL 60532
Fax: (630) 328-2190
Attention: Jeffrey Park

with a copy to:

Sidley Austin LLP
1 South Dearborn Street
Chicago, IL 60603
Fax: (312) 853-7036
Attention: Gary D. Gerstman
Scott R. Williams

(ii) if to the Stockholders, to:

New Mountain Partners, L.P.
New Mountain Affiliated Investors, L.P.
787 Seventh Avenue, 49^th Floor
New York, NY 10019
Fax: (212) 582-2277
Attention: Mr. Michael B. Ajouz

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, NY 10004
Fax: (212) 859-4000
Attention: Aviva F. Diamant, Esq.

11.9 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware.

11.10 Submission to Jurisdiction; Waiver of Jury Trial. Each of the parties hereto (i) consents to submit to the personal jurisdiction of any Federal court located in the State of Delaware or any Delaware state court in the event any dispute arises out of this Agreement or any of the transactions contemplated hereby, (ii) agrees that such party will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that such party will not bring any action relating to this Agreement or the transactions contemplated hereby in any court other than a Federal court sitting in the state of Delaware or a Delaware state court and (iv) waives any right to trial by jury with respect to any claim or proceeding related to or arising out of this Agreement or any of the transactions contemplated hereby.

11.11 Counterparts; Facsimile. This Agreement may be executed in any number of counterparts, each of which will be considered an original instrument, but all of which together will be considered one and the same agreement, and will become binding when one or

more counterparts have been signed by and delivered to each of the parties. This Agreement may be executed by facsimile signatures of the parties hereto.

[Signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be executed the day and year first above written.


		SXC HEALTH SOLUTIONS CORP.

		By:		/s/ Jeffrey Park

				Name: Jeffrey Park
				Title: Chief Financial Officer

		NEW MOUNTAIN PARTNERS, L.P.

		By:		New Mountain Investments, L.P., its general partner

		By:		New Mountain GP, LLC, its general partner

		By:		/s/ Steven B. Klinsky

				Name: Steven B. Klinsky
				Title: Chief Executive Officer

		NEW MOUNTAIN AFFILIATED INVESTORS, L.P.

		By:		New Mountain GP, LLC, its general partner

		By:		/s/ Steven B. Klinsky

				Name: Steven B. Klinsky
				Title: Chief Executive Officer

Signature Page
to the
Registration Rights Agreement

EX-99.12 7 ad99_12.htm CERTIFICATE OF AMENDMENT ad99_12.htm

Exhibit 99.12

CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
SERIES A 7% CONVERTIBLE PREFERRED STOCK OF
NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.

(Pursuant to Section 242 of the General Corporation Law of the State of Delaware)

National Medical Health Card Systems, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), in accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:

1. That by resolution of the Board of Directors of the Corporation (the “Board”) pursuant to Section 151(g) of the General Corporation Law of the State of Delaware, and by a Certificate of Designations, Preferences and Rights (the “Series A Certificate of Designations”) filed in the office of the Secretary of the State of Delaware effective as of March 19, 2004, the Corporation authorized shares of Series A 7% Convertible Preferred Stock, $0.10 par value per share, of the Corporation (the “Series A Preferred Stock”) and established the powers, designations, preferences and relative, participating, optional and other rights of the Series A Preferred Stock and the qualifications, limitations and restrictions thereof.

2. That the Board deemed it advisable to amend the Series A Certificate of Designations as set forth herein (the “Amendment to the Series A Certificate of Designations”).

3. That the stockholders of the Corporation adopted the Amendment to the Series A Certificate of Designations in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

4. That the Series A Certificate of Designations is hereby amended as follows:

Section 3(a)(iii) is deleted in its entirety and replaced with the following:

(iii) Each such dividend shall be payable on the applicable Dividend Payment Date to the holders of record of shares of the Series A Preferred Stock, as they appear on the stock ledger of the Corporation at the close of business on the day immediately preceding such Dividend Payment Date. Any dividend that is not otherwise paid in cash on the applicable Dividend Payment Date (whether due to the Corporation’s inability to pay such dividend in cash or otherwise) shall automatically, and without any action on the part of the Corporation, accrue and compound and be added to the Accrued Value on such Dividend Payment Date. Once such dividends have been added to the Accrued Value, dividends shall accrue and accumulate thereon in accordance with clause (i) or (ii) of this Section 3(a), as applicable, until such time, if any, as such dividends, together with all accrued and unpaid dividends thereon, are subsequently paid in cash by the Corporation (at which time such dividends, to the extent paid as aforesaid, shall be deducted from the Accrued Value). Dividends shall cease to accrue and accumulate in respect of the Series A Preferred Stock on the Optional Redemption

Date, the Redemption Date or the Conversion Date for such shares as the case may be, unless (1) in the case of the Optional Redemption Date or the Redemption Date, the Corporation fails to pay any amount necessary for such redemption (including any accrued but unpaid dividends required to be paid at such time) when due in accordance with Section 4(c) or Section 5(c) hereof, as applicable, or, (2) in the case of a Conversion Date, the Corporation fails to deliver certificates representing the Common Stock or other assets or securities issuable upon such conversion within three Business Days of the Conversion Date; in the case of either clause (1) or (2) above, dividends shall continue to accumulate and accrue from the Redemption Date or the Conversion Date, as the case may be, at the rate indicated above, or from the Optional Redemption Date as set forth in Section 4(f), until such payment (and payment of such additional dividends) and/or delivery (and delivery of such additional shares or money owed by reason of the continued accumulation and accrual of dividends) is made. Any holder may request in writing that the Corporation pay any dividend or all dividends authorized with respect to any or all Dividend Payment Dates by means of wire transfer to an account specified by the holder in such notice. Such notice shall not apply to a Dividend Payment Date if received less than five days prior thereto.

Section 6 is amended to add the following paragraph (e):

(e) Notwithstanding anything to the contrary in this Certificate of Designations, (i) neither the entry into the Merger Agreement or the Stockholder Agreements by the Corporation or any of the other parties thereto, nor the exercise by Parent or Merger Sub of any of their rights under the Merger Agreement or the Stockholder Agreements, nor the consummation of the Offer or the Merger, shall constitute a Change in Control or Liquidation, and (ii) if shares are accepted for payment in the Offer in accordance with the terms of the Offer, any shares of Series A Preferred Stock outstanding immediately prior to such acceptance for payment shall, upon their conversion into shares of Common Stock, only have the right to receive the Offer Price, or, if the One Step Merger is consummated, any shares of Series A Preferred Stock outstanding immediately prior to the One Step Merger shall be converted into the right to receive only the Merger Consideration.

Section 8 is amended to add the following paragraph (g):

(g) Notwithstanding anything to the contrary in this Certificate of Designations, from and after the date of the Merger Agreement until the termination of the Merger Agreement in accordance with its terms, any shares of Series A Preferred Stock that convert into shares of Common Stock shall convert at a ratio of one share of Common Stock for each share of Series A Preferred Stock and no adjustment shall be made to such ratio.

Section 11 is amended to add the following definitions:

“Board of Directors” means the Board of Directors of the Corporation.

“DGCL” means the General Corporation Law of the State of Delaware.

“Merger” has the meaning set forth in the Merger Agreement.

“Merger Agreement” means the Agreement and Plan of Merger, dated as of February 25, 2008, by and among the Corporation, SXC Health Solutions Corp. (“Parent”), SXC Health Solutions, Inc. and Comet Merger Corporation, as amended from time to time; a copy of the Merger Agreement will be made available without charge to any stockholder of the Corporation upon request.

“Merger Consideration” has the meaning set forth in the Merger Agreement.

“Offer” has the meaning set forth in the Merger Agreement.

“Offer Price” has the meaning set forth in the Merger Agreement.

“One Step Merger” has the meaning set forth in the Merger Agreement.

“Parent” has the meaning set forth in the definition of Merger Agreement.

“Stockholder Agreement” has the meaning set forth in the Merger Agreement.

IN WITNESS WHEREOF, National Medical Health Card Systems, Inc. has caused this Certificate of Amendment of the Certificate of Designations, Preferences and Rights to be executed by its duly authorized officer this 26th day of February, 2008.


NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.
By:	/s/ George McGinn
	Name:	George McGinn
	Title:	Secretary and General Counsel

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